Posted in Newsletter by A2IM
BY: BRUCE IGLAUER
Article Link: http://www.billboard.biz/bbbiz/search/article_display.jsp?vnu_content_id=1003988178
“Labels are obsolete.” We’ve read this line a hundred times, and heard this “wisdom” from bloggers, columnists and even artists whose successful careers have been bankrolled by well-established record labels. With the decline in recording costs, the rise of social networking sites for promotion and the “level playing field” created by retail downloaders, the DIY approach has become the mantra of many aspiring recording artists.
Don’t believe the hype.
It’s true that musicians can now cheaply access the technology to record and attempt to market their own albums. According to Nielsen SoundScan, there were 105,000 new album releases last year in the United States, including digital-only titles. But let’s be clear: The ability to make an album isn’t the same as the ability to market and sell it.
A few artists have made their own recordings, put videos on YouTube, created MySpace pages and went on to sell a significant amount of music. But not many. Of those 105,000 albums from 2008, only 6,000 sold more than 1,000 copies in their first year of release. So, where’s the disconnect?
The media image of record labels—which many DIY-ers believe—is of gigantic, money-driven corporations committed to turning pretty boys and girls into plastic “stars” with short but lucrative (for the labels) careers. Perhaps this description has become too true of the major labels. Their huge overhead expenses requite them to generate equally huge cash flow (though cash flow and profit aren’t the same thing).
And with the physical marketplace dominated by big-box retailers that won’t gamble on developing artists, the only way to generate that kind of money is with pop hits that will be stocked by the Wal-Marts of the world. But the majors are struggling because, as the bloggers and columnists have said over and over, “The old way ain’t working anymore.” Hit songs are the ones most constantly shared online, and the remaining sales just aren’t big enough to create the necessary cash.
But the bust-up at the majors has provided a big benefit for indies. As the majors reduce their rosters, the indies have become the home for category-busting rock bands and developing hip-hop acts, as well as established artists in genres like jazz, blues, folk and classical. While some are best sellers, many genre artists aren’t big enough to feed the majors’ money machines, but they’re big enough to be profitable for labels and retailers if they’re marketed intelligently by dedicated labels.
Aggressive, committed independents have done what individual DIY acts can’t do on their own—build the media connections and marketing savvy that lead to music sales. Many artists don’t realize that media outlets and radio stations won’t pay much attention to music that doesn’t come from an established source and is available to their readers or listeners. Though media continues to fragment, even bloggers simply don’t have the time to listen to everything. And traditional and online retailers won’t be motivated to do business with an artist-run label that may never have another release. Plus, with the growth in importance of film, TV and videogame placements, many indies have devoted themselves to making connections with music supervisors.
In this tough new music business, many smart artists continue to realize that their best opportunities won’t come from working on their own or from the ever-shrinking world of the majors. Instead, they’re increasingly turning to enterprising and innovative indie labels as partners.
In celebration of independent music labels, the American Assn. of Independent Music will be marking its fourth anniversary by hosting its annual meeting June 29 in New York. We will be joined by visiting indie label colleagues from around the world. ••••
Bruce Iglauer is founder/president of Alligator Records, a 38-year-old independent label, and a member of AAIM’s board of directors (a2im.org).
