The Future of the Music Industry

Musicians' unions - $0.17
Packaging/manufacturing - $0.80
Publishing royalties - $0.82
Retail profit - $0.80
Distribution - $0.90
Artists' royalties - $1.60
Label profit - $1.70
Marketing/promotion - $2.40
Label overhead - $2.91
Retail overhead - $3.89
Buying a brand new CD - priceless*

Naptser changed the world. In 1999, Shawn Fanning, a Northeastern University student created a peer-to-peer file sharing network which allowed internet users across the globe to get access to music and other media easier than ever before and for free. The future had arrived.
In 2000 however, Napster began to find itself in legal troubles after Metallica discovered that their unreleased song "I Disapear" had found it's way onto the network and from their to radio stations. The band filed a lawsuit. They were followed by Dr. Dre and a livid Madonna whose unreleased track "Music" had leaked. The lawsuits seemed to do little to slow Napster's growing popularity. At it's peak in February 2001, it was reported to have 26.4 million users.

The music industry was concerned. However, as the RIAA went on a witchunt pinning declining album sales to online fine sharing, Radiohead proved that programs such as Napster can actually be benificial to an artist's career. Three months before the release of their fourth album Kid A, it ended up on the network. Unlike most other music that was being leaked at the time, Kid A wasn't as commercial. In fact, no music videos were made to support the disc, nor any singles released, yet, it became the band's first #1 album. The success was credited to the promotion Radiohead recieved on Napster.


Fast forward to October 2007. Radiohead had fullfilled their six album contract with EMI and released their seventh studio album, In Rainbows. Like Kid A, it made it onto the internet before it was physically released, but this time, it had nothing to do with music pirates. Lead singer, Thom Yorke commented, "every record for the last four—including my solo record—has been leaked. So the idea was like, we'll leak it, then." The album appeared on their website as a digital download, and listeners could choose how much they wanted to pay for it.

The name-your-own-price version of In Rainbows no longer exists, but the idea has blown up the internet. Granted, any new release from Radiohead is bound to cause some buzz, but their do-it-yourself release has made headlines in rock journalism and blogs and had doubtlessly made the record industry sweat. Radiohead has proved that you don't need the middleman. Record companies as we now know them will one day be a thing of the past.




When Madonna's eleventh studio album is released later this year, she too will have fullfilled her record contract and is abandoing the record industry. The singer is reported to have signed a $120 million, 3 album contract with a concert promotion firm, Live Nation. This is only the beginning. Times are changing and the record industry better evolve to meet 21st century technology and tastes.

As Duncan Riley put it, "The only real question now is how fast will the music industry model come tumbling down. When Radiohead led the way in offering their music directly to fans many predicted that the move was the beginning of the end; Madonna may well be the tipping point from where we will now see a flood of recording artists dumping record labels and where todays model will shortly become a footnote in Wikipedia."


*Rolling Stone magazine - October 12, 2004

2 comments:

hun*ter said...

Don't click on that comment, it's a spam link to some download "virus protection" site.

Emily Nicole Schroeder said...

Hunter, this is something pretty cool. commenting on whats up and popping with the biz. do you want to turn to journalism or something?

I knew that Radiohead and Madonna were on my good list for some reason. They are changing things, rebels at heart, and good riddance. What have you been listening to since you've gotten back? hunter! how was paradise in the south pacific for that matter?!

I think that it is important that our favorite artists are being supported by their media sales so that they can continue to make good and beautiful music that is true. But they are who i care about, not the middle man, and so if they are making it just fine, this new way of getting music seems perfect to me.

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