Disintermediation - this is what is happening to the traditional music labels as they fight the changing market. The change has come about because of the proliferation of digital downloads of various types. Selling music on CD's and other physical media is declining fast. Learn some lessons from this kind of trouble, it could be you.
Middle men everywhere are in trouble. In the music business that includes the Labels, who come between the artists and the public. Their primary business is to market and distribute the music. Now artists can easily distribute themselves via the internet. The labels spend enormous money on finding and marketing bands, then make up for it with ridiculous distribution charges (the marginal cost of making a CD is less than a quarter). But if they don't distribute - all their money is gone, eh?
So although distribution has changed drastically, marketing is still needed by all but a few bands. After all, it is still a very competitive market - witness the great number and variety of acts at the recent South by Southwest festival. The labels have to find a method to get paid for their marketing prowess, that is all they have left. They may have found a solution with the recent agreement to work with Myspace.
Lesson - if you do several things well, and something or someone takes away one of your markets, you must decide to continue with what you do best, and get paid a premium for it, or find another business.
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment