An Outdated Music Industry in a New Era…Still

The year was 2008 and the platform was all about MySpace. YouTube was barely a thing. The iPhone had just been introduced and you could only use it with AT&T. iTunes became the second-largest retailer of digital music in the US. If you wanted to film something you used this cumbersome piece of equipment called a camcorder and if you really had money, then it was digital. Home studios were finally becoming affordable. Tunecore was still brand-new and the idea of digitally distributing your music to retailers all over the world instantly was still a foreign concept.

It was a different world 13 years ago when my second album “Mirrors” came out and changed my life as an artist. It was a different music industry, too.

Matt Annecharico mirrors album cover

After what I call, the “Napster Revolution” in 1999 that pulled the rug out from underneath the recorded music industry, the powers that be were trying to grasp on to what was left of that power. Technology provided the means for change in the music consumer, a change the recorded music industry could no longer control. When Apple’s Steve Jobs single-handedly convinced the major labels that they needed to move with the times and adopt a digital release strategy that would convince people to pay even a little bit of money for music rather than downloading it for free, they initially resisted the idea. But resistance, as the saying goes, is futile and they reluctantly gave in leaving record labels to find a way to make up the losses from sales. To do this they turned to one of the last things they still controlled: artists. 

 

In comes the disastrous 360 Record Deal. At its core, the deal involved the record labels taking a percentage of all the artists’ entertainment-related income – everything from merchandise sales, touring, acting appearances, book sales, brand partnerships, and more – even if the record label played no direct role in the artist obtaining that income. This was in addition to the already ridiculously high percentage the record labels were taking from artists’ sales – up to 90% in many cases. The argument made by the record labels was that “without us, you wouldn’t have music on the market nor would you have any notoriety which means you wouldn’t have had that opportunity anyway”. Soon the 360 Deal started to be referred to as the gold standard in the industry and was shoved down the throats of music students and new artists as the deal to strive for if you wanted to ‘make it’ in the recorded music industry.

 

Another casualty was artist development. True artist development. This was when the record label would help the artist to develop a long-term and sustainable career because it was seen as mutually beneficial. With the loss of income from music sales, the development of an artists’ career was deemed too expensive for record labels. In its place they invest only in the development of a particular project and the artist often has little creative input in the process. In fact, if the artist did not conform in the way they are supposed to for the good of the project (according to the record label), which many times conflicted with the artists’ own objectives and values, they were dropped from the label. Artists became the commodity.

 

The truth is the 360 Deal and doing away with artist development was not the result of the Napster revolution as the major record labels will have people believe.  Instead, these changes were the result of fear and, what author Simon Sinek refers to as “playing a finite game” – that is, playing to win rather than playing to keep playing, in his book The Infinite Game. Instead of embracing the change that was happening in the industry and in society, they chose to fight it by suing music consumers and screwing over artists. Instead of imagining the opportunities that lay ahead, those with the power did what people in power often do when they are suddenly losing it – they relied on deceit, general naiveté, and played the victim. But the majors are not the only ones to blame. Artists were also playing the finite game. Instead of focusing on building long-term sustainable careers for themselves, they sought the illusion of fame and fortune, willing to give up the income, give up having a say in their work, and willing to give up the development in their careers that record labels used to provide. Who needs those things anyway? All artists needed was that illusion of celebrity dangled in front of them and to be surrounded by a fancy multi-million dollar recording studio to convince them to sign on the dotted line. But the majors knew this about artists and they took advantage of it making it all the more disgusting. They preyed on them.

 

Let me be clear: I don’t think the major record labels are bad. Music piracy put them in a bind, and they behaved in the way that our capitalist society said they should. But they missed an opportunity that would’ve, in the long run, afforded them the control they so badly desired. In a way, the Napster revolution was the catalyst for the change that was happening in society with the improvement of technology and changing consumer demands, not the cause of the change. The labels simply reacted instead of pivoting.

 

I’m often asked if record labels are still relevant and the answer is YES – undoubtedly. But not in the same way as they were before. And any of these deceitful companies trying to sell artists on the ‘be your own record label’ hoop-la is only blowing smoke up their you-know-where. Phrases like this anger me to my core because they are just true enough to mislead artists so that these companies can take their money and take advantage of them. It’s predatory! Record labels provide artists with a vast amount of opportunity, expertise, ability, and connection to the industry. The people that work at record labels likely spent years developing their skills and connections. Some may have even spent thousands of dollars whether as artists themselves, on gear, and/or in education. Artists who sign to a label get to tap into this instead of having to take years and waste thousands of dollars themselves. A sort of short cut. The value of labels is clear even till.

 

What has changed is society – the demands of the music consumer, the needs of the artists, and technology. Remember the days when being signed to Motown or Capitol Records meant something to the music consumer? If you’re under 30 years old, probably not. It doesn’t matter to consumers anymore. Therein lies the problem for labels: consumers don’t care about them. Imagine, then, how consumers felt after the record labels’ lawsuits started flying at them. As social media usage skyrocketed, music consumers and artists had a more direct connection with one another, and this is what both parties want – without the intervention of the label. So, while the majors conformed to their capitalist principles in the early 2000s, they missed the part where their consumers had changed from being the music consumer to being the artist themselves.

 

As the music industry becomes even more fragmented with all of the platforms that artists can use to grow their audience, more than ever before, artists need record labels to be partners with them again. To invest in their long-term growth and to have their best interests at heart rather than to treat them as a commodity that can be easily replaced. While record labels can provide the artist with a lot of insight and guidance into consumer behaviors, the labels should be in service to the artists and let the artist worry about their consumers. Key phrase – their consumers.

 

When I started my company, Dreamscope Media Group in London I did it with this in mind. A new kind of record label that put the focus back on the artist and developing a long-term partnership with them. A record label that focused on artist development at its core, that gives the artist a seat at the table when decisions needed to be made, that gives them a majority share of the income from sales, and that gives them ownership of their material. In 2020 we even launched a program that allows artists to own shares in the company after completing certain growth milestones in their own careers. We regularly guest lecture in universities and we even released an artist development book called “Just Thought You Should Know”, available on Amazon. None of these things should be ground-breaking but unfortunately, they are.

As the world changed, so too should the music industry and it has largely remained the same, albeit with fewer players in the game.

In 2020 when COVID-19 hit, the music industry, yet again, had the rug pulled out from under it. This time it was the live music industry. For the first time in the history of live music, the playing field was leveled. Artists who once filled stadiums night after night all around the globe were now performing from their living rooms over the internet in the same way that unsigned artists had been doing for years. Think about that for a moment. The playing field was leveled. The live music industry had been full of people who called themselves “promoters” that demanded an unknown act bring at least 20 people to the gig on a Tuesday night, effectively doing the job of promoting the gig, or risk not getting paid. Even if they managed to be paid, it was only a small percentage. Meanwhile, the live music at a venue often drew in a crowd to an otherwise empty bar or restaurant and the artist saw nothing in return. Now, the live music industry is crying out for help to stay alive after they spent years stifling the careers of regular artists by putting them on a bill and then not dignifying their performance with payment. Instead, they should be pivoting, and the smart ones will. Oh – and they should be paying artists. Now there’s a novel idea. An artist should be part of the expense of running your business and not the commodity.

 

As the world changed, so too should the music industry and it has largely remained the same, albeit with fewer players in the game. Dreamscope chose not to react to the changes brought on by the pandemic but instead to act infinitely by allowing the pandemic to be the catalyst for change, making its artist development – true artist development – available to everyone on our new e-learning platform DaCapo Learning. We released new guides and strategies for artists to be able to make a living even during the pandemic because more than ever before people were turning to music and entertainment for escape. While artists were stuck at home, it provided an opportunity to upskill and reimagine the ways they can achieve the goal of a long-term sustainable career and we wanted to provide that service.

 

Artists are more capable today than we were 13 years ago. They have more tools at their disposal, more opportunity, and the barrier to entry is virtually gone. Anyone can release music now. But what an artist does after the release of a project is what can determine their fate. Today, with music streaming, social media, and the rise in artist services platforms, the power is in the hands of the artists – where it should be – and not with the labels. But with great power comes great responsibility. To keep learning. To check the pride at the door. To treat music like a job and not a hobby. To learn patience and self-discipline. It’s the role, then, of the record label to support the artist as they carry the awesome power that comes with the control they now have.

 

Indeed, it is a different music industry than it was 13 years ago. In many ways it’s still the same. I don’t know where the music industry is headed. No one does. But I know this: music never dies. Music will live on past this pandemic and the next. Creative people will continue to create. And thank God for that. Now, lets get the recorded music industry and live music industry straightened out so that its fair and better for us all.

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