The Future of the Music Industry

This article taken from TuneCore Blog article. writes by Jake Smith, is a TuneCore Customer Support Representative and Editor of the Weekly Newsletter . and I published back here with the only purpose of information spreading.

To say it's been a bumpy decade for the music industry is a bit of an understatement. After Napster's introduction in June of 1999, we've seen ten years of new formats, declining record sales, lawsuits, and passionate arguments from all sides (artists, labels, the RIAA, and consumers) about the pros and cons of these drastic changes. Has suing music pirates done anything to curb illegal downloads? Has digital file sharing helped new artists reach more fans faster? Where will the industry be ten years from now?

iTunes 9 recently came out, and with it a variety of new "bonus" features that come with selected albums. These iTunes LPs as they're called can include album extras like music videos, digital booklets, artist band photos and more (important note: at this time TuneCore is not yet set up to deliver content as iTunes LPs - we will make a HUGE announcement when we are able to, stay tuned). Features like these have got me thinking about the innovative ways in which stores, labels, and artists have worked towards making incentives to pay for, rather than steal music. In my opinion, the music makers and retailers who stick to the list below will be the ones leading this crazy music business into the future.

1. Stop fighting the changes

The digital revolution was and continues to be scary for those who once made the brunt of their money selling round pieces of plastic. In the wake of peer to peer websites that allowed for people to share and receive music files without spending a dime, the first response of the Record Industry Association of American (RIAA) was to sue the peer to peer services themselves. After this proved only to spawn new peer to peer services, the RIAA turned its sites on the people doing the sharing. Suddenly, people of all ages, shapes and sizes found themselves being sued for thousands and sometimes millions of dollars in damages. I don't mean for this to turn into an argument about the pros and cons of file sharing, but I think most people would agree that these giant lawsuits haven't done much of anything to stop the piracy problem. I remember a particularly pathetic attempt by BMG to create an "unrippable" CD on which to print their new releases. One day after the release of the first disc in this format, it was discovered that by using a black sharpie around the edge of the disc, you could burn and import it with no problem at all.

The moral of the last ten years? It's futile to fight changes in how people consume their content. Consider this: once upon a time, the biggest threat to the industry was that people could use cassette tapes to record songs off the radio. Piracy stinks but as long as music is written and recorded, the danger of it exists. This leads me to my next thought:

2. Sell things that can't be stolen

Maybe people will always find ways to crack codes and steal content in our digital age, but there is money to be made by providing consumers with additional ways to connect to the music they love. Some things to consider:

* Classic merchandise is still very big: T-Shirts, Buttons, Stickers, and even less traditional items like USB drives and Snuggies keep many bands in the black.
* Music "powers" other products: Movies, TV Shows, commercials, video games (The Beatles Rock Band, anyone?), even greeting cards have been great, "non-stealable" ways of getting music out there.
* Give consumers bonus "rewards" for buying: iTunes LP definitely practices this idea - now, instead of just getting music for your money, you get cool additional content as well. Other incentives could include bonus tracks for people who pre-order, providing different formats (CDs, digital downloads, vinyl records), offering limited run "premium" items (coffee table books, first 100 copies signed, etc).
* Don't forget live shows: While music sales may have dropped, concert attendance is as high as ever. Give fans a show to remember and they'll keep coming back!

3. Quality over Quantity

I read this really great interview the other day with the founders of Merge Records (Arcade Fire, Spoon, M. Ward). While other labels, both big and small, have had some really extreme ups and downs over the past 20 years, Merge has remained steady. Instead of pouring hundreds of thousands of dollars into every artist they release then praying for one of them to make it big, they focus on putting out the artists they love. If they don't expect to make a ton on the release, they keep recording and promotional costs low. As a result, Merge have positioned themselves as taste makers. When indie music fans see "Merge" on a new artist, they see it as a mark of quality. The lesson in this? The more good product you provide your fans with, the more they will respect and support you. I would argue that whatever shape the music industry may be in ten years from now, the song will always be king.

But what do you guys think? Share your thoughts with leave comments below...