What the hell has happened!!
I realised that it has been a month since my last blog post on here at least ;) and suddenly in that time the world is on the brink of its Minsky Moment with a full on meltdown, our very own Guy gets ready to get rid of that greedy American woman (and hopefully sends her back to NYC)
As well as in the digital media world:
- Nokia pulls the wool over everyone's eyes with (Almost) Comes With Music (but not really - so you'll have to make do with bad DRM experiences and very little rights..) - i'll go into this one on a separate blog...
- AC/DC (2nd biggest CD selling act in the World - even now in 2008) decide to distribute their new album Black Ice, via Wal*Mart (al la Eagles back a couple of years ago) with a guarantee of 2.5million copies (that's double platinum in the US and probably diamond in UK as the biggest selling album last year managed 1.5mi in a year) classic line from Steve Barnett “If you want to be a physical band, you better make an alliance with a strong physical retailer” agree that the money that the retailers can guarantee is too much for any artists just now to pass up - however how quickly will the album reach the P2P sites and be distributed another 2.5million times (just like Radiohead) But then there is physical merchandise, tour sponsorship, games tie up - means that for AC/DC - they will guarantee themselves a bigger payday than most artists.
- This, in contrast with Live Nation who's mega-payout gives them access to shares in tours, promotional items, and a slice of the recording (if they can only get their label side sorted out - where are they going to distribute this and how) but then there is not one successful application of this yet - their business model is not yet proven and with the amount of money that has been exchanging hands this is one hell of a gamble
- Guns 'n Roses also jump on this bandwagon and Best Buy obviously bid highest to get their hands on Chinese Democracy (at last - wonder if they heard it before they purchased the distribution rights!!) I think I have commented, blogged and discussed the various times that the album was due to come out - even to the point that the FBI were involved - but if it does come out before Christmas will Dr Pepper follow up on their promise to give every US citizen a can of Dr P? Again I would have thought that there would be a merchandising strategy attached to this as well as a heavily sponsored Tour (think of The Police comeback tour) but Axl has never been the most reliable performer and the potential lawsuits of missed gigs due to... well whatever will need to be factored into any tour schedule. Interesting that Live Nation didn't touch GnR as they were a perfect fit for their ambitions with a huge merchandising loyal fan-base as well as the Chinese Democracy Tour that could go on for years...
So in summary what does this mean in terms of the state of the music business? Well if you are an established multi-platinum selling artist that wants to continue to sell millions of units (not that there are many of them around anymore - AC/DC sold more albums than The Rolling Stones in 2007 - and The Stones were on a full World Tour!) then get into bed with a retailer that can deliver your product to the mass market. Best Buy and Wal*Mart as well as Target in the US have been doing this over the last few years to some degree of success. How do bands feel about these kind of relationships? They will be branded "sell out" by their hardcore fans, however you cant deny the selling power of these giants. You could compare a reformed Led Zep album being distributed exclusively through Tesco in the UK with a tour sponsored by Tesco. However in the UK there seems to be more of a backlash against this type of action.
Either way we have some extremes where some labels will shun iTunes (Kid Rock, Estelle) because of what it represents in terms of massive market share - however to Estelle's horror this backfired and Warners had to do a big turnaround to keep her American Boy track going.
What is the difference then between iTunes and say Wal*Mart?
One is a physical retailer with footfall and associated products the other is a digital distributor that has an 80% marketshare of the digital music space along with "must have" hardware that just works seamlessly with each other, as well as associated digital assets to go along with your purchase.
So in essence nothing really.
The AC/DC and GnR retail deals are fine if you have the size to command a $2.5million advance for sales of your physical product or if your product is 14 years in the making and have previously sold over 100million units. Unfortunately for labels there are very few artists that can command this and Live Nation are just about to find this out the hard way with their strategy.
Either way I'm back, I'm blogging and ranting and looking forward to holding my physical copy of Chinese Democracy while sucking down a Dr Pepper!