In reading an article about the plummeting of music CD sales believed to be caused by the increase in music downloads (purchased and pirated), I got to thinking about the music business in general. While most news stories and editorials talk about the effects of the music distribution industry, I can't help but wonder if this will effect the music industry as a whole--artists and fans included.

To be sure, the record industry is worried. They are in the business of music distribution. The Internet is changing the face of the business completely. No longer do we need record labels to compile a list of songs by a band or an artist and release it to the marketplace. Instead we can go to iTunes, Napster, Morpheus, Wal-Mart or a number of other music "distribution" services available and get the music we want one song at a time.

The old method of buying twelve songs for the three you like is over.

This proposes a dilemma for the record companies who find that they no longer have control and are; therefore, no longer needed for music distribution. The record labels are being cut out of the loop.

But what about the recording artists? For many the web has been an incredible outlet for song distribution, especially for bands that have been unable to get signed to a major label. Other, more established bands, have also used the web to distribute their work, doing an end run around uncooperative record labels. But how will this pan out in a future where albums are rare and songs are sold in singles rather than in bulk?

I may be wrong, but I think the online music revolution will change the music industry as we know it with effects reaching far beyond the record label to the point of effecting the artists and their fans.

Let's think about his for a moment. Artists (or their record labels) typically release 12-14 tracks per album. At most (with rare exception), five of those songs make radio airplay over the next few months. Let's assume that the average cost of a CD is $13 (this is a bit low, but we'll factor in sale prices, online stores with low overhead, etc.) and the cost of the average download is $0.99 (ignoring pirated downloads). If the music purchaser chooses not to purchase the entire CD and instead buys only the five songs that make radio airplay (assuming the listener likes all five songs) then the gross revenue drops from $13 to $4.95. That's over a 50% drop in gross revenue and I was being very cautious with the figures. In reality I think it'll be much higher, but let's stick with that figure.

Of course, with the record industry out of the picture a 50% drop in total revenue won't necessarily equate a similar drop in the artist's profits, but it’s still got to hurt. Also keep in mind that it is the record labels that provide the music to the radio and music video stations, pushing their artists and releasing the songs that they feel have the best chance of success at the best determined time. Eliminate that from the equation that leaves the artists themselves to push their music. That expense can certainly add up for artists without a lot of capital, which is just about any new and upcoming artists struggling to break through.

Without the targeted distribution provided by record labels we'll now have more songs from a single artist, not to mention every other established and aspiring artist competing for airplay. This could ultimately dilute the ability of good songs to stand out and become a "hit". Sure, the truly exceptional songs will stand out easily enough, especially with online and viral marketing efforts in place, but those will be the exception rather than the rule.

Fewer hit songs ultimately means fewer single song sales, which turns into even lower profits for the artists.

Even now it is difficult enough to break into the music business and make it big. There are plenty of bands out their waiting their due time to get discovered so they can play music full time. Without the agents of discovery (record labels) that's about to get even harder. Many potentially great artists may give up and keep their "day jobs". I think we'll see fewer bands willing to stick it out in the off chance they get the right song to the right audience at the right time.

The online revolution won't kill the music industry, but it will likely change it significantly. Fewer artists will make it to the big time while many more will be flash-in-the-pan, one-hit-wonders. I won't be surprised in five years when I see struggling artists holding up signs that say, "Will sing for food."

March 22, 2007

Stoney deGeyter is the President of Pole Position Marketing, a leading search engine optimization and marketing firm helping businesses grow since 1998. Stoney is a frequent speaker at website marketing conferences and has published hundreds of helpful SEO, SEM and small business articles.

If you'd like Stoney deGeyter to speak at your conference, seminar, workshop or provide in-house training to your team, contact him via his site or by phone at 866-685-3374.

Stoney pioneered the concept of Destination Search Engine Marketing which is the driving philosophy of how Pole Position Marketing helps clients expand their online presence and grow their businesses. Stoney is Associate Editor at Search Engine Guide and has written several SEO and SEM e-books including E-Marketing Performance; The Best Damn Web Marketing Checklist, Period!; Keyword Research and Selection, Destination Search Engine Marketing, and more.

Stoney has five wonderful children and spends his free time reviewing restaurants and other things to do in Canton, Ohio.

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