The Many Models of Music

Posted by on June 23, 2008 at 8:01 am.

Wired is one of those rare magazines I usually read cover to cover during the month it arrives. Every now and then I get a nice surprise when I find an old article I somehow missed. Today is one of those days.

David Byrne wrote a brief, yet informative, article about the evolution of music distribution on page 125 of the January 2008 issue. It’s a topic I’ve thought about since the Napster days and I hadn’t seen someone map the landscape of artist options as succinctly as David has. He also did a better job than most at describing the music experience our genetics long for, not just a CD or recorded song.

David describes music as:

“Before recording technology existed, you could not separate music from its social context….Music was an experience…Technology changed all that in the 20th century….We’ll always want to use music as part of our social fabric: to congregate at concerts…to pass music…to want to know more about our favorite bands….This betrays an eternal urge to have a larger context beyond a piece of plastic.

He then proceeds to share six possible music distribution models, including the varying artist opportunity, problems and control that stems from each.

  1. Equity Deal: Every aspect of the artist’s career is handled by producers, promoters, marketing people and managers. Example: Pussycat Dolls, Korn, Robbie Williams
  2. Standard Deal: Label bankrolls recording and handles manufacturing, distribution, press, and promotion. Artist gets royalties and label owns copyright/recordings. Example: Talking Heads, most “big label” artists
  3. License Deal: Similar to standard deal, but artist retains copyrights and ownership of master recordings. Example: Arcade Fire w/Merge Records
  4. Profit Sharing: Minimal advance from label for recording costs and minimal marketing, share profits of record sales, not concerts etc. Example: Byrne w/Thrill Jockey
  5. Manufacturing and Distribution Deal: Artist does everything except manufacture and distribute. Artist has total creative control, but less marketing, bigger risk. Example: Aimee Mann
  6. Self-Distribution: Music is self-produced, self-written, self-played, and self-marketed. Sold at concerts, online with MySpace promotion etc. Freedom with significant financial constraints — easier for more established artists. Example: Jane Siberry (Issa), Radiohead

Unlike most commentaries on the music industry revolution, David didn’t point fingers or declare superior/inferior models. Rather, he recognized there are different strokes for different folks — with repeated references to what may be best for new bands versus established bands.

I’ve always felt the debate between labels, artists and consumers is too black-and-white. The model that works for Radiohead or Coldplay, might be a disaster for a brand new group with minimal audience and name recognition. The black-and-white debate also fails to acknowledge that artists have varying goals: some just want to make a living while others might aspire to being the top selling artist of all time.

The different goals and different models for success reminds me of entrepreneurs and new venture funding models. Bootstrapping, friends and family, angels, venture capitalists and banks all have a role for different entrepreneurs. The entrepreneur who wants to be the next Microsoft or Google requires a different funding path than the entrepreneur who just wants a flexible lifestyle or a family business they can pass to their kids. Trying to find a single “best model” for all entrepreneurs or all musical artists is doomed for failure, it’s a spectrum of options that unlocks opportunity for creators and consumers.

Related images: aimee mann, arcade fire, coldplay, david byrne, jane siberry, korn, radiohead, robbie williams, wired

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