Guest Blogger: Moses Avalon, author of many music business books, including 100 Answers to 50 Questions on the Music Business and Confessions of a Record Producer. Check out all his books here. Watch Avalon Wednesday (July 24th) morning on Fox News on Varney & Co. at 9:20am-11am EST. He will be discussing streaming music’s effect on the music industry. The following is a teaser from his blog on this topic. Visit mosesavalon.com to read the entire article.
Will subscription services, like Spotify & Last.FMobsoletize the need or desire to own music files, thus killing the lifeline of artist and record company revenue?
Some say not enough people will pay for music monthly (as if it were electricity) for it to be sustainable. Who’s being realistic verses who is being romantic can be hard to pinpoint if you don’t know the player’s agendas. In this three-part series internationally recognized music business expert Moses Avalon will try to bring clarity to this latest deep disruption to the music space.
Part 1: Why Major Labels Love Getting Pennies Instead of Dollars
In 2001 the Internet community declared the music industry DOA, predicating total decimation by illegal P2P file sharing services within five years. The major record labels disagreed.
Today, after a decade of lawsuits and lobbying major labels make about the same revenue from albums while selling 30% less units then they did in the pre-Internet era. (1989-2000: $48.6B, 2001-2011: $53.3B)
Tortured album sales (which inched ahead since 2010 with the death of the two biggest illegal P2P services: Limewire and Kazaa) has inspired cost-cutting in the supply chain, thus reducing royalties and fees paid to music creators. Net result: the industry has hovered at $10 Billion a year and thus-far survived the Internet transition many other industries have failed to do. Score one (a big one) for the majors.
But will it matter?
The latest music Armageddon theory is that subscription based streaming services like, Spotify, MOG, Last.fm and Rdio (“Streaming”) will cannibalize recording artist’s main revenue: ownership, both of physical CDs and downloads from stores like iTunes and Amazon.
Why buy and maintain files if you can stream them on demand any time, anywhere, through any device for nine bucks a month?
The industry jargon for this is called going from an “ownership model to an access model.”
Keep reading this article on Moses Avalon’s blog!
For the first time, industry expert Moses Avalon, the author of truth-to-power tomes likeConfessions of a Record Producer and Secrets of Negotiating a Record Contract, answers readers’ questions directly in this pointed analysis of business issues for musicians, producers, and managers. Chosen from questions submitted by readers of Avalon’s popular blog, the 50 questions he addresses in this book represent the most pressing issues in the modern music business, and his no-nonsense answers make up an essential “cheat sheet” for anyone looking to break into this challenging industry.