 |  |  |  |  |  |  |  |  |  |  |  |
 |  |  |  |  |  |  |  |  |  |  |  |
 |  |  |  |  |  |  |  |  |  | ||
This company, Prefueled, or one much like it is the future of offline music sales and distribution.
We expect this will be the year that CD’s are pulled from major retailers like Wal Mart, and are replaced with units like these. And you can bet Pro Soul will do our best to get our artists on them!
Apple Inc. recently announced that it will be removing digital rights management (DRM) technology from most of the music it sells on iTunes, an action that will surely prove detrimental for the music industry giants who have long been advocating the technology to prevent illegal file sharing.
The technology prevented iTunes-purchased music from being used on non-Apple devices, or shared with others and played computers other than the one it was purchased on.
Although all four major record labels finally approved the move – almost two years since Apple CEO Steve Jobs first proposed the idea – experts are hailing it as the end to control over how consumers purchase and enjoy their music.
According to Michael Geist, the University of Ottawa’s renowned professor of Internet law and e-commerce, “what it does show is that the long-time strategy of locks and lawsuits that the industry adopted several years ago has been terminated, out of failure.”
For more details, see the story in the Globe and Mail.
Interesting how major labels only cease to employ ineffective strategies long after they have proven to be pointless despite the recommendation of industry leaders and futurists! Would you want to invest your career and future with organizations like that?
In other Apple news, Steve Jobs has stepped down as CEO for a few months due to serious health problems. We’re you’ve committed to taking care of yourself Steve, and hope for the best.
Because of their unwillingness to adapt and meet the needs of consumer and artist, who have long been calling for digital distribution that is easy to use, efficient, affordable, and unrestrictive, record companies have been merging, cutting costs, making massive layoffs, dropping artists, and twisting the facts. They are unable to afford to sign as many new artists unless they are already established and successful. Partnerships with such companies are extremely risky now, both for the corporation and for the artist. Even if these companies now decided to suddenly change to meet the needs of artists and consumers, the current infrastructure and legal obligations make it nearly impossible.
The industry’s concept of instant monetization based on a product is quickly becoming passé. According to Forrester Research, half of all music sold will be digital by 2011. The two essential components previously required to release music – a record label and retail distribution – are no longer needed. Artists are using the DIY method to release their music to audiences with whom they have built relationships through online and offline means. Even experienced industry experts, including Nettwerk CEO Terry McBride, have advised their clients that they need not sign or renew contracts with major record labels.
It’s not easy for artists to do it themselves in a new industry though, and many don’t even know what to do to become successful. They still need the help of professionals. So what does the future of the record label look like? It must be one that provides a full range of services, customized to the artist’s needs, while eliminating the negative aspects associated with a traditional label. These include large recoupable expenses that drastically reduce an artist’s profits, and control of the artist’s rights to their music. In this changing music industry, monetization has moved from a product to a relationship, and the new label must assist artists to affordably develop their career by building a strong, long-lasting relationship with their audience. Only this will create sustainable financial rewards that far surpass those possible with simple CD sales alone.
There are scores of individuals and companies claiming to have the secrets and the answers to help artists do it themselves in the changing industry, but their old-fashioned techniques often fail to reflect the new direction of music consumption in the 21st century. Buzzwords, like “getting signed”, “press kits”, and “radio airplay” no longer hold the relevance they once did.
Pro Soul offers the ultimate solution: working in the best interests of the artist, without taking the artist’s rights or profits – simply providing essential effective services that a label should by established industry professionals. A novel concept indeed, but one that label founder and industry veteran, Jarome Matthew, says has been a long time coming. The new music industry requires the relationship with fans to be nurtured, a daunting task to many artists who simply wish to create music. Pro Soul assists artists in this area, through unique viral marketing techniques, connecting offline activities with the online world, and creating innovative promotional campaigns. The key objective of this is to develop a core group of loyal, dedicated fans that will continually support the artist. And instead of the label financing artists up front, artists choose from a variety of flexible monthly subscription options offered with no contracts, that can be upgraded or cancelled at any time to fit the artist’s changing needs at different stages of their career.
In an age where Radiohead and Nine Inch Nails have proven that the game has changed and that a drastically different idea of how to reach consumers can work very well, Pro Soul just might have the solution that is desperately needed in the music industry.
The antiquated record industry has had it good for a long time now. Really good.
In analyzing this, we could go back a long way to when it first started taking advantage of artists’ poor business sense to make money, but for now, let’s start with the compact disc. That’s when the music industry really started cashing in.
At this point, copyright ownership, packaging deductions, recoupable expenses and controlled composition clauses ensured that the record label earned a lot more than the artists. So things were good for the labels. But then, because the latest innovation in music playback technology cost so much more to produce, the record industry would have to charge $18.95 instead of the $9.95 that cassettes cost – just ‘temporarily’. But CD’s were better quality, so it was worth it, right? (We now know that to be bull).
Well, the prices never went down, and this was when the music industry really started taking advantage of not only the artists, but the consumer as well. It’s important to note that by this time in the late 80’s, most major labels were now, or would become, owned by non-music related corporations.
When the Internet became widespread with its mp3 and peer-to-peer sharing technology in the late 90’s, the music lover, gouged for 10 years with $18 albums, finally had a chance to fight back and show the industry how it wanted to consume music instead of the other way around. And what did the industry do? They said what any smart industry would: “Hey, things are changing, and if we don’t meet the demands of the consumer and give them what they want, we’re in trouble!” Right?
Wrong! They sued their own customers, and flooded the media with propaganda about how the Internet was killing the record industry in 2001. And the media bought it, ignorant of how, according to Neilsen and RIAA stats, record industry sales actually only dropped 4.1 percent in a rock bottom economy despite a cut in their inventory and artist investment by 25 percent. There were almost 12,000 fewer new releases for the consumer to choose from in 2001 than 1999. The record companies were making more money per release than ever (George Ziemann).
Artists started using the Internet too, realizing they could do a lot of what only a record company could do before, online, using powerful but inexpensive web 2.0 tools that are easily accessible. Innovative services like MySpace, CD Baby, and YouTube, allowed them to distribute digitally and deal directly with fans themselves. This launched the Do-It-Yourself (DIY) movement, making it clear to record companies that not only consumers but also artists could get along without them.
These drastic changes are shifting power away from major record corporations and back to independent artists. The Internet is delivering infinite options for fans through digital means, and the focus is more on the quality of music and artistry rather than on the pre-fabricated, corporately-controlled puppets of the past.
Stay tuned for more in tomorrow’s post.
