Creative Destruction, The Musical

Alex Singleton’s LibertarianHome blog (go bookmark it) today highlights a new Economic Research Council report on the British pop music business called Creative Destruction In the Music Industry: The Way Ahead. The report’s author is Andrew Ian Dodge.

This study is yet more confirmation that the radically changing universe of digital content requires new business models and drastic liberalization of spectrum and airwaves–policies worthy of tomorrow’s torrent of broadcasted, narrowcasted and self-casted content. Protection won’t even save the recording industry in its current form since the industry is a middleman operation that must adapt given the increasing cheapness of both recording technologies and distribution–the hurdles that helped create today’s particular middlemen in the first place. Middlemen will happily persist in a more complex digital age, of course, and can be even more profitable as “filters” for the entertainment we see if they do their jobs well. But they will be of a very different character

For just one example of the changed distribution landscape, both signed and unsigned bands increasingly rely not on single-album sales, but on the online sale of each and every concert that they perform, much the way Gov’t Mule does. Mule frontman Warren Haynes also helps front the Allman Brothers and (sometimes) the Grateful Dead. Their project The Deepest End, a live tribute by some of the world’s leading musicians to Mule’s bassist Allen Woody who sadly died young, features bassists like Flea, Bootsy Collins, and Jack Bruce. (But did you even know about Gov’t Mule? Guess I’m a middleman; you can pay me if you want.)

Some of Dodge’s findings appear below. While he compares the British situation to that of the U.S., much remains to be resolved in the U.S.; witness our debate over the so-called “broadcast flag.” But reports like Dodge’s–whose own blog reveals an affinity for heavy metal–make the job easier.
– British musicians are failing to break into the lucrative American market because they are failing to exploit new technology and the recording labels do not understand the diversity of the American market
– The BBC — unfairly — dominates the airwaves and decides what may and may not be played
– And the BBC even contributes to the mass manufacture of boyband/girl-band phenomena instead of allowing for musical diversity
– American bands manage however to penetrate the UK market with ease
– The music industry worldwide though is fighting a losing battle with the Internet which regards it as a threat rather than a way to engage with their customers
– Aspiring musicians can now use several services and technologies that bypass record companies and traditional retail outlets completely
– They can also target new digital sales channels; ringtones, mobiles and taxis
– The BBC’s monopoly of the airwaves must be ended for the public to enjoy a wider choice of music
– Live music must be resurrected as a vital market research tool to find what customers like
– Musicians must embrace the new distribution technology (like CD Baby)
– Recording labels must specialize — not diversify
– The cost of recording, releasing and distributing music has never been cheaper
– Record companies no longer have a monopoly on sound technology or recording studios
– Their model of over-spending on a few stars is over
– The future of music is ever increasing choice and diversity