The music business is in need of a radical shake-up. While the Recording Industry Association of America goes around suing their own customers, the music corporations they represent continue to grossly under use peer-to-peer file-sharing, online social networks like MySpace and the Internet, in general, as a new mode of distribution and marketing.
Music sales are down, but it's not illegal file sharing that's hurting the 'Big Four''EMI, Sony BMG, Warner Music Group and Universal Music Group'the most. According to 'Music's Brighter Future' in The Economist, 'an internal study done by one of the majors [showed that] between two-thirds and three-quarters of the drop in sales in the United States had nothing to do with Internet piracy.'
The rest seems to stem from other underlying problems with the music biz'less retail space, competition from other media, the rising cost of CDs and, above all, the quality of the music itself. So what's a multi-national music corporation to do?
First off, turn to Big Champagne for marketing advice. BC started off by analyzing the same P2P networks that cost the Big Four an absurd amount of legal fees, but soon after started tracking online music sales, streamed songs and videos and more traditional mediums for music distribution.
The hearty digital soup that results from this diverse collection of meta-data can find 'whether listeners have found a hit before radio' and give the music industry a better measure of an artists' success, according to 'The Chumbawamba Factor,' an article by Chris Dahlen at the online music critique hub Pitchfork Media.
Dahlen wrote that modern music dominates the hits on download charts, but exceptions can arise'last August, Journey's 'Don't Stop Believin'' broke into the iTunes top 25 when 'Family Guy' and 'Laguna Beach' both used the song.
The Big Four should heed this phenomenon and peddle their back catalogs the same way they market their new music'there is an enormous audience of music fans out there, both young and old, that don't pay much attention to releases after 1990.
Where did this audience come from? My guess is they got fed up with modern music outlets. Music execs need to realize that MTV and the thousands of Clear Channel-owned stations out there aren't the tastemakers they used to be.
While a lot of these disgruntled consumers run to classic rock and oldies radio for their musical fix, many indie music fans turn to www.pitchforkmedia.com and www.metacritic.com to find new artists. While I don't always agree with Pitchfork's snarky and overwrought reviews, a lot of the time these guys get it right, to the benefit of fledgling artists and music fans everywhere.
The 'Pitchfork' effect can be seen in the success of bands like the 'Arcade Fire' and 'Clap Your Hands Say Yeah.' The latter, then-unsigned group became an overnight Internet sensation after their self-titled record got a 9.0 on Pitchfork. Thousands downloaded the album and, after a few months of online acclaim, sold over 40,000 records'all without a record deal.
If the major labels took a closer look at MySpace profiles and Pitchfork, they could get nearer to the hearts and minds of file-traders... as well as their wallets.
Still, the music industry would have to do a whole lot more to regain their lost audience. In 2004, the mobile ringtone industry grew to one-tenth of the size of the music business. The Big Four have made inroads towards this market through Motorola's new iTunes-ready phones, but this is only the first step.
The inevitable success of a wireless-enabled iPod that could access iTunes has huge implications for the music industry. Instead of grappling with Steve Jobs about the prices of songs on iTunes, the Big Four needs to strengthen this partnership to stay afloat in the future.
And while Big Champagne's data mining is already informative, it cannot track BitTorrent downloads. According to British Web analysis firm CacheLogic, BitTorrent downloads account for 35 percent of all the traffic on the Internet. As it stands, Big Champagne is missing a huge chunk of downloaders in its statistics.
All of this will take time, of course, but when iTunes sold its billionth song last week, it heralded a future shift in the music industries' business model and the de-stigmatization of downloading music. Like the New Pornographers'a Pitchfork favorite'sang, 'It was crime at the time / but the laws, we changed `em.'
