Sunday, July 06, 2003

Buying A Hard Disk For Music

I engaged in some willful consumerism today. is ripping his complete CD collection, and, together with my music directories, we simply didn't have the disk space anymore. We went to Microcenter to price external hard-disks (IEEE 1394 and USB 2.0 capable) and found out to our surprise that each 50 Gig is around 100 bucks. That's not much for serious space.

This is making me think about the future of music. The reason Dino is ripping his CDs is so he can stream them to our stereo using the TiVo. That he is willing to go through this with all his discs shows how ubiquitous home MP3s of your own collection end up being really nice. Listen to everything wherever. iPods et. al only make it more compelling. We listen to music more often now that the whole collection is available with a simple remote control, instead of trying to find a CD among your stacks and stacks on stuff.

So before I cracked one-third of my laptop's LCD screen into oblivion, I was actually wondering if I could allocate the funds to buy a 500 buck old apple laptop and an iPod so I could buy iTunes. The Apple iTunes store is not just getting great reviews, it is getting great downloads. People like having music choices, not being stuck to the structure of CDs, being able to impulse buys for one, ten, fifty songs, after they have been able to decide they like them, on the spot. I would like to be able to find a lot more new stuff.

On the blogs I follow there are many people who recommend all kinds of tracks they are listening to. I'd love to be able to click a link when they write it and then get my iTunes or Rhapsody 30 second pre-listen and then know whether I like it or not. Download, store, transfer to iPod, have. Perhaps a special link isn't necessary, a mozilla or safari plugin that will look terms up in iTunes (Mac or Windows, when the latter comes out) and then take you there. Read a friend rave about music, right-click, find it.

It is total materialism, but at only one dollar a pop, and actually not at such egregious terms for the actual artists as CD sales. They get 12 cents. Why is this good? Because the big labels don't subtract all kinds of shady deductions like 'breakage', an old holdover from when vinyl and wax rolls and other product actually broke. Artists on big labels get a small fixed percentage of breakage deducted from their royalties since that product was assumed to have broken and thus unsold. It is still being deducted now that artists have music shipped on the non- or way less- breaking format of CDs. Behold the corporate masters, they will recoup from artists even what they didn't advance or charge.

Now take CD Baby. Their model is to be some kind of Internet store for indie artists, but they structure themselves as a record label. Unlike the big record companies hey don't advance money for an artist to record, they won't promote an artist, they won't fork money to get the artist played on radio, nor ship their CDs to stores, of which they own none themselves anyway. What they will do is pure order fulfillment, and give most of the cash to the copyright holders who partner with them to sell their stuff on the label. Greg reports that his partner, who sells some CDs through CD Baby, actually gets real checks.

Apple has said they only want to deal with aggregate entities like record labels, they do not want the hassle of being like and have to deal with all these copyright holders individually. But CD Baby has been offered by Apple to join the iTunes online music store. CD Baby has said that they want to, and not only that, they will allow anyone with music to offer it on the music store through them, for a very small cut, thus allowing independent artists access to the iTunes virtual store shelves while Apple gets to keep not having to deal with masses of independent artists and tiny labels. Everyone gets what they want.

Now take a look at this and this These are articles and questions about how recording actually getting cheaper, to the point that you can make something very decent by yourself at home. Ok, so people whose music depends on acoustic recordings will always have to fork big-ish money for mics and soundbooths to do great recording, but electronic music is already at the stage where it is born on a harddisk and never need leave there. Mixing can then all be done on a good modern PC with ProTools -- no need for a huge expensive mixing console. Making Pop quality music is coming to the masses.

So, distribution electronically is kinda taken care of, you no longer need a huge advance to make a record -- just gamble on your maxed out credit-cards... so what exactly can BMI or Sony Music with their leeching contracts do for an artist? Well, only they can create phenomenons the size of Britney and Madonna. Only they have that promotional muscle. But suppose you don't want to take the craps shoot when you sign to a big label to be the one of the 100 they sign who gets backing, suppose you want to retain all creative and copyright control, suppose you don't want to be molded, suppose you aren't as radio friendly as Madonna and Britney, and suppose now that all you want is to make a living, or a side-gig, and not be the biggest act in the world. Suppose you only want to get heard. What do Sony and Bertelsmann have for you now? Nothing. They aren't interested in small fry. Their business model is structured around that one who makes it really big compensating for all the advances and promotions they never recoup from the 99 failures.

But you still need some form of promotion. People need to know you are making stuff (Dino is telling me to say 'Hi!' to my livejournal because he actually thinks I am chatting) before they will flock to iTunes to buy it. How do you do that? Read a couple of paragraphs upstream: I wanted to try all this music that other people were mentioning. (In marketing/business speak, what I am saying is that Sean and A. are 'opinion leaders and taste-shapers' for me. Perhaps for many others in our interconnected communities too.)

Hmmm. So I am seeing a new direction for independent labels, that doesn't involve trying desperately not to go out of business dealing with the distribution channels of the big labels -- no matter how indie they are as labels, they end up needing those channels, and all kinds of licensing and rights-management hilarity always ensues. One that is a simple extension of what small labels already do. Get your related bands together, sign reasonable contracts for artists whose music works with each other. Make their webpages, help them manage their merchandise through the volume contracts you as a label can get, offer the artists music on iTunes and other electronic stores, do the CD fulfillment when people want CDS, take all the minor promotional things off the artists hands. But also, identify the people who are opinion leaders in their groups: Djs, clubbers, programmers of background music in bars and stores, the cool kids, etc, etc. Get them product, they'll tell others.

Do this on a small scale, no need to create a Britney or Justin. Keep contracts with your small roster of local or perhaps geographically very dispersed talent simple. Organize their electronic presences together so people finding one artist find others in your group. Take your cut from the sales. Nobody gets exploited. Everyone makes a small living. Shift away from having to deal with RIAAs and payola and ClearChannel, but go whole hog on mainly electronic distribution and promotion, tapping the interconnected networks that arise around any taste, any sensation, any social trend. The web groups everything together. Eschew billboards and MTV, go for bloggers, journalers. Don't spam, though. Never spam.

Hell, if a mainly electronically organized label actually makes enough money, they could perhaps advance money for studios, organize tours, the works. And we consumers get our friends to tell us what is good.

The only real problem left? What to do when our harddisks crash now that all our music has been acquired in non-physical form. I foresee a market for very easy, very cheap backup solutions.