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January 12, 2008
"That was the moment we realised the game was completely up"

A fascinating article in The Economist called The Music Industry — From Major to Minor opens with this paragraph:

IN 2006 EMI, the world's fourth-biggest recorded-music company, invited some teenagers into its headquarters in London to talk to its top managers about their listening habits.  At the end of the session the EMI bosses thanked them for their comments and told them to help themselves to a big pile of CDs sitting on a table.   But none of the teens took any of the CDs, even though they were free.  "That was the moment we realised the game was completely up," says a person who was there.

Woah....  Y'r business plan is toast, man.

The music industry has basically committed suicide.  Sure enough, the business arrangement they gravitated to, involving a few large record companies, A&R people with focus groups, unfair contracts with musicians, a few large companies owning hundreds of radio stations, payola, playlists, retail stores with high prices and limited stock, the whole shebang, makes for an unsupportable industry.

It sounds bad, but it's not really.  In fact, it's very good news.  It means that the elements of mediocrity are in free fall and that there's a huge opening for an entirely new music business based on a more artistically favorable core.  If anything, now is the time for the new music entrepreneurs. 

Don't believe me? Okay, note that Apple's iTunes is currently the fourth largest retailer in the country.  And note that iTunes didn't exist before 2001.

Also do check out this delightful article in Wired called David Byrne's Survival Strategies for Emerging Artists — and Megastars Which includes interviews with Brian Eno and Thom Yorke.  The opening paragraph is here:

What is called the music business today, however, is not the business of producing music. At some point it became the business of selling CDs in plastic cases, and that business will soon be over. But that's not bad news for music, and it's certainly not bad news for musicians. Indeed, with all the ways to reach an audience, there have never been more opportunities for artists.

These are going to be very interesting times for entrepreours in the music industry.

Posted by DonTillman at January 12, 2008 06:56 PM

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