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> Is new music killing the record industry?
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post Feb 25 2015, 12:08 AM
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An article by the Guardian asks the question many don't want to hear ohmy.gif

New music will dominate proceedings at the Brit awards on 25 February, as it does radio playlists and newspaper and magazine websites. As well monopolising nominations for British breakthrough act and the critics’ choice, both aimed squarely at new acts, debut album makers – Sam Smith, Royal Blood, George Ezra, FKA twigs, Ella Henderson and Clean Bandit – feature heavily as contenders for the main awards. But does the relentless focus on finding the next big thing make any kind of sense for the embattled recorded-music business?

Despite declining revenues, the record industry’s investment in new talent – what would in other businesses be classified as “research and development” – is vast. In 2013, according to the British Phonographic Industry (BPI), British labels invested £149m in A&R – approximately 21% of the industry’s total revenues. An almost identical sum was spent on marketing. By contrast, Italian defence company Finmeccanica is considered exceptional in its field because it invests 10% in R&D; and in the automobile industry, no company spends more than 6.5%.

Music has never been more widely available, faster to access, or easier to discover. Yet despite all of the investment, the number of new acts who are building sustainable careers is tiny – and shrinking. In 2009, again according to the BPI, 46 debut artists had an album sell 100,000 copies or more in the UK. In 2011, it fell to 32, and last year only 14 acts hit that mark.

“I was posed a question by a senior exec back in 2008, when iTunes was exploding,” says Will Page, director of economics at Spotify. “Should you gamble $5m on one artist, or spread your bets of $1m each on five different artists? In an age of unlimited choice, do you bet big or bet small?”

The answer, so far, has been that the industry does both. But as income has fallen, artists are given less time to turn a profit. Tales of major-label signings being dropped after one album – sometimes before a record has been released – are becoming more common, even after enormous amounts of money has been spent on marketing the groups, as was the case with the Universal’s Monarchy and Palladium. Could the industry reverse its decline if it returned to what might be considered the old-fashioned model: sign fewer artists and work with them for longer periods, worrying less about the short-term fix of big hit singles and spending more energy building catalogues that generate cash over a much longer period?

Even if it were that simple, the industry may struggle to change course. Daniel Glass, a former major-label head who set up Glassnote Records in 2007, suggests that the US industry in particular is still configured to work in a very different way.

“The pop, R&B and country promotions staffs at majors are enormous around America, and sometimes around the world – and that machine needs to be fed,” he says. “And that machine does a very good job, but they have a different infrastructure and different bills to pay. A major is going to expect quicker returns, and therefore we’re not seeing a lot of second, third and fourth albums, or lengthy careers.”

Glassnote has a deal with Universal, and its artists – which include Mumford & Sons, Chvrches and Phoenix – are able to plug in to the major label’s global distribution and promotion systems. But Glass argues his label’s independence gives it an ability majors may lack to sign artists for the long haul.

“We take very few bets a year,” he says of Glassnote. “We’ll sign one to three artists a year, where [major labels] are signing up to 20. What our label does is try and find the best live artists in the world. Now, when I just said that, I didn’t say the words ‘hit record’, I didn’t say the word ‘single’. I am hoping that those great live artists, who are bonded with their fans both at concerts and online, are going to make good records. We’re going to supply the atmosphere, and funding, to have them make good records that we can get exposure for, and inspire them by helping with a good team of people. It’s a different business model than picking up hit records.”

Glass suggests majors carry out “a lot of research by picking out things which are ‘happening’”. Data-driven approaches to identifying future successes may work in other businesses but, Page suggests, there’s something intangible that makes pop harder to plan.

“For all the talk of data and algorithms, we can’t lose sight of the role of human instinct,” he says. “I recall as a kid visiting Ensign Records and hearing Nigel Grainge talk about why he believed in an unknown artist called Sinéad O’Connor. For a label which had only five staff, they signed and developed an artist who went on to sell 11m albums. Data wouldn’t have predicted that then, nor would data predict that now.”

Bombay Bicycle Club’s Jamie MacColl: ‘We don’t spend a million pounds and months in a studio. So it’s far less of a risk.’ Photograph: Matthew Baker/WireImage
There are still examples of artists signing to major labels and being given apparently old-fashioned chances to build careers over a longer period. Bombay Bicycle Club were one of 18 British acts to sell 100,000 albums for the first time in 2010. They have released a further three LPs, with last year’s Mercury-nominated So Long, See You Tomorrow reaching No 1 and their year ending with a sell-out headline gig at Earl’s Court, in London.

The fact that their label, Island, haven’t tried to push his band toward making records with more obvious hit potential “continues to surprise me”, says Bombay’s guitarist, Jamie MacColl. “But I think that depends on two things. The first is that we haven’t made a record that’s failed yet, and the second is that we don’t cost the label a tonne of money. We don’t spend a million pounds and months in a studio with the best producers and writers, and we have a solid fanbase who will hopefully buy 70,000, 80,000, 100,000 copies of an album when it comes out. So it’s far less of a risk for them.”

The changes in how music is being heard may make a move away from short-term thinking inevitable. Streaming services such as Spotify, which ensure that an artists’ previous albums are available for discovery – and income generation – when a fan discovers a band via their fourth or fifth LP, could help lead labels away from breaking new artists and prioritising blockbuster hits.

“What’s interesting about streaming is that the lifetime value proposition counters what’s been a 50-year mindset of front-loaded sales that decay over time,” Page argues. “This isn’t to suggest one model is better than the other, as sales are transactions which lead to consumption, whereas streams are consumption without transaction. But it will involve a mindset shift of watching new bands go into week one with, say, 400,000 streams, and then watching that figure grow, and not decay, over time.”

Sixteen countries now include streaming data in their singles charts; and from this week, album streams are being counted alongside physical and download sales in the UK’s album chart. That is important, Page argues: “Charts make the popular visible, and the visible popular.”

If streaming helps prolong a record’s chart life – and therefore its visibility – labels that adhere to the long-haul formula may be better placed to capitalise. But both label and artist have to be prepared to make a break from the quick-fix mentality.

“You’ve got to have patience,” says Glass. “Do we want to turn a profit? Absolutely. We would like to turn a profit after each cycle, but we always know it really takes albums two and three to solidify a career. If the artists and the managers and the agents that we do business with are telling other artists about us, then we’ve succeeded. And that’s your business plan. It’s not the fancy lunches, it’s not flying around chasing airports and planes – it’s about artists.”

Slightly drained at the moment so will comment more later BUT the way I see it is the question of should the music industry be invest more in artists for the LONG TERM rather than invest in new artists for the short term. I do feel that a lot of effort is often put into artist's debuts only for this support to reduce after this. Yes, it is of high importance to recognise and support new music but it's also highly satisfying to see artists with a lasting career rather than one/two albums and out.
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post Feb 25 2015, 12:44 AM
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I feel the record industry's approach of "one strike and you're out" is less organic on their end and more pushed by other media, particularly radio.

It's exceptionally rare for a new act without a 100% hit rate to be given time of day on radio - Charli XCX is the first act in a very long time that I've seen fail at first and then find their feet later. It's not the labels' fault if one failure is enough for public media to stop supporting an artist entirely and it is quite frankly a waste of money to continue with an artist that has had a flop single in 90% of cases because any future push for them will likely get ignored.

I mean it even happens with legends. Britney had one underperforming lead single in 'Hold It Against Me' and she never got playlisted by Radio 1 again after previously rarely (if ever) missing the playlist. What chance do younger artists stand?

(note that this post is entirely UK-centric, other countries tend to be far less harsh)
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post Feb 25 2015, 12:55 AM
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I say this is because the major labels are no longer willing to take chances anymore. They are not willing to try and break the mold because they fear it will break the bank.

For instance (yes I'm gonna use Britney), Britney was signed by Jive Records in 1997 and they spent almost two years molding that album and used a good amount of money doing so. It was a MAJOR risk, boy bands and girl bands were in and solo artists were out in the pop scene. By Jive gambling on her and a well funded album campaign they not only made a MASSIVE profit from her, they started a worldwide trend! Right after 'Baby One More Time' you had an explosion of interesting females acts trying to follow suit on the market that BRITNEY found. And there lies part of the problem as well. Instead of trying something else to break the trend, they just followed the most recent thing proven to make money. Epic records changed Half of Christina Aguilera's debut album in order to mimic Britney's success (Christina had been cited saying her label told her she needed more tracks people could sing along to instead of just power ballads), and we saw the appearance of (now long and forgotten) Mandy Moore, Jessica Simpson, etc.

However, that all worked with the absence of social media. Today? No. If Britney and Christina were starting off today, they could easily acquire a fan following through Facebook, youtube and soundcloud. The problem is that the major record labels have never been creative, the artist has. But, these days the artist does not need the record label or a deal with MTV in order to be noticed.

Read between the lines okay, that makes sense in some type of way. I always lose myself in rants. 🌚
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Chez Wombat
post Feb 25 2015, 12:57 AM
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George Ezra is one of the rare cases recently where it seemed like he wasn't getting anywhere after the Sound of... poll in terms of mainstream attention but Budapest finally charting in the top 10 in the UK last year and well...the rest is history. Persistence works...sometimes at least, risks can pay off. I don't think record labels should become too safe with their choices.

I think new artists are always needed, it's just a combination of very little mainstream attention and a lack of investment or effort put into them by the label which makes. I think with new artists 'bubbling under', striking while the iron's hot/hype's building is important for newer artists, taking 2+ years off when you don't really have the strength of a devoted fanbase/huge sales (I'm talking Adele/Rihanna style big here) to back it up doesn't seem a very wise move.

This post has been edited by Chez Wombat: Feb 25 2015, 01:00 AM
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