Thursday, January 28, 2010

The Music Industry of the Future

We live in a time when the music industry is in a state of flux. It's trying to adapt to the new while holding on to the past - some months more in the present, and other months still steeped in the old. One thing we know for sure is that it's changing quickly. Music 3.0 is here to stay and music 2.5 isn't coming back.

So what will the music industry of the future look like? There are 5 areas where it will change, as I see it.

1) Subscription Music - Industry pundits have been predicting for ages that digital music distribution will ultimately change from paid downloads to subscription, and they'll finally be right. The upcoming US introduction of the Spotify service will push the ball up the hill. The iTunes subscription service (which I predict will debut in 2011) will seal the deal.

2) Hybrid Record Labels - Even today most record labels are more concerned with selling music products than anything else. In the music industry of the future, the new hybrid labels will be more concerned with rights management than actual sales. Since it's so easy for an artist to produce and even market his own product (the traditional duties of a record label), they'll no longer need those functions. But they will need an entity that's expert in overseeing their digital rights in the variety of distribution streams that will exist, from streaming to download to subscription to licensing (supplanting the traditional publisher) to even physical product like CDs (while they're still around) and boxed sets.

3) A New Gig Model - A band dies if it doesn't gig. That's always been the way an artist made the majority of its income. It's pretty impossible to gig outside of an act's home area unless they have an agent, and the agent had a good relationship with promoters and venues. The new model would make it easier to connect an artist directly with venues, either eliminating the agent or as an adjunct to an agent. On the concert side of the music business, the agent is the middle man, much the same as a record label. Agents will have to change the same way that labels have.

4) The New 5th Beatle - Producer George Martin was always the uncredited "5th Beatle," since his input was such a huge part of their success. In the future, that person will not be a musician, but a web presence expert. It'll be a kid that's spent all of his time on every social network, learning all the ins and outs. The guy who just graduated from college who learned everything about web design and programming that he could just because he thought it was so cool. The kid who loves music, loves the band, can't play a lick, but can handle every aspect of their social media presence better than anyone in the organization. He's the guy that allows them to utilize Music 3.0 (the interaction with their audience) to it's fullest.

5) A New Media Package Replaces The Album - The album as a package was great for it's time, but that time is not now. At some point in the future a new multi-media package will combine audio, video, photos, text and interactivity into a new product that's fit for the time we live in. There are already a number of experiments that we'll soon see come to life (MXP4 is one technology; the major label backed CMX is another). Regardless of whether these catch on or not, it's inevitable that some combination package will.

In some ways, the future is almost here. We're starting to see the social media 5th Beatle pop up. Subscription music has been around for a while and growing, but still not at critical mass. Record labels are getting hipper to the needs of Music 3.0, a new gig model is brewing, and the rich media album is about to be born. The question is not longer if, it's when will the future get here?

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