Interesting Article on the State of the Music Industry in "The Economist" ~ BrooklynRocks: NYC Music Blog

Friday, July 20, 2007

Interesting Article on the State of the Music Industry in "The Economist"

I am finally catching up on my reading and there was an interesting article in the July 7th issue of The Economist on the state of the music industry. For years now, every band that I have known has said that they make almost no money from CD sales. I have heard repeatedly that a band needs to sell the volume (number of CD units) of a Madonna or Garth Brooks or they make next-to-nothing. I am a bit curious why The Economist is positioning this as new news. The reality is that most bands support themselves by touring and merchandising. Some bands make a ton of money from touring and others just scrap by.

I guess the awareness of this fact of life is growing now that artists like Prince are giving away their CDs and making all their money by touring. The Economist notes that "concert ticket sales in North America alone increased from $1.7 billion in 2000 to over $3.1 billion last year". The article goes on to state the "[r]ecord labels have come up with a remdy: the '360 contract'. Instead of settling for a cut of CD sales, they increasingly offer artists broader contracts that encompass live music, merchandise and endorsement deals." As you would expect, most artists are extremely gun-shy of these types of deals. Currently, the "major" acts who have signed these types of deals are Robbie Williams, the Pussycat Dolls and Korn.

I'll be interested to see what comments and feedback this article gets. I just don't see the major labels being able to replace the artist management agencies. It will be especially interesting to see what becomes of the careers of "packaged acts" like Robbie Willaims and the Pussycat Dolls now that they have put all aspects of their career in the hands of the major labels.