Tuesday, December 09, 2008

Earache Going Digital & 360 degree deals?

Question: how has earache found the transition to digital music, a lot of labels seem to be going for the 360 approach. From:

Answer:Good question- there is always a lot of online buzz and chatter about this subject, and I read an interesting posting on INVISIBLE ORANGES blog recently, which summed up the current scenario very well, giving a balanced arguement and realistic suggestions for once, rather than the typical "labels = bad, free mp3s = good" stance, which sadly seems to be the consensus among the blogterati.
The internet & the digitisation of music, making it freely available to copy, has driven a huge upsurge in interest in all forms of music.Certain forms of obscure niche music which had been hitherto off the radar to most music buyers, because of lack of instore CD racking space devoted to it, those scenes are now enjoying somewhat of a boom.If you are a fan of Korean pop singers or Peruvian pan pipe/flute music, this is an amazing time for you, as you can download exactly what you want, to your hearts desire.I count Earache's extreme metal catalog as a similar type of niche which is benefitting from exposure via the internet.The hard part for serious labels which have fully staffed offices and a substantial catalogue is to actually try to make money to survive and continue to release decent music, faced with the onslaught of so called fans who seem to be settling more and more for crappy CDr burns off a mate or downlaodable files, instead of the 'real product'.

Our own artist Gama Bomb recently came out in favor and actually encouraging fans to download albums for free- they are a new band so all exposure can only be good for them, but they do admit they'd probably not say that if they were a huge selling act, and had more to personally lose than gain by encouraging it.To test their convictions, and for a laugh, I might suggest Earache gives away their next album for free via the internet, it would save us making Cds and Vinyl anyway, and because we do have a 270 deal with the band, it might actually be the smart thing to do, as we also handle the song publishing and merchandising for the band and receive a small slice of that income aswell, it makes it economically sensible at least.
360 is shorthand for when a label has a stake in and a slice of the income from all possible sources, usually meaning 1) recording,2) song publishing, 3) merchandising and sometimes 4)gig performance fee income aswell.Earache's deals might be accurately termed 270 deals.

The inside scoop is that labels are starting to do very well from digital music,the legal download services, iTunes being the biggest, suprisingly do now actually pay substantial sums to labels, including Earache.I guess all those hundreds of millions of folks who got ipods sooner of later discovered the itunes store itself and now the novelty of ripping cds into it has worn off, they absolutely dont mind now shelling out 99c for a track, knowing its decent quality, no DRM, highly convenient and legal.

Our problem at Earache nowadays is dealing with the multitude of legal download platforms which are follwing in iTunes footsteps, and seem to spring up from nowhere, and all want to include our catalog on their site.We must get one per day who assume that Earache is desperate to launch on their unproven website and will pay for the previlege of being represented there.Its fair to say we dont see eye to eye with these upstart tech guys, just because they developed some nifty sofware that streams and sells mp3s they reckon they're doing us a favor by even offering their services,but we do try to co-operate with them as best we can because we know its the future.
The culture of the upstart,high tech, very fast moving software industry is so alien to the culture of the more measured, long term copyright holding, music industry folks that its a wonder any deals get done at all.This failure of either side to accomodate the other back during the infancy of the net in mid-late 90s is the major reason that legal digital music was so long in coming, leaving the way wide open for the illegal sites like the famous trailblazing Napster, then the later sites likes of Kazzaa/Limewire/Soulseek and other newer p2p torrent sites to claim the territory, and victory.

Realising their mistakes,most of the major labels hired technology experts - EMI hired an ex-Google tech guy for instance- specifically so they can form a closer understanding with the technology companies.Myspace Music also launched in September 2008, which promised to pay the labels for the millions of free streamed songs on which the brand built its fame from 2004 onwards.Sadly the deal to pay for music included only the 4 Majors, and excluded the Indie labels,which was a shock, but that is hopefully being rectified soon we think.
Most of the big online companies making up many of the largest companies in the world have recently concluded deals to pay labels for the use of their music -Google/Amazon/Microsoft/Nokia etc.The explosion in music based video games- Guitar Hero/ Rockband where we have several acts appearing, has undoubtedly helped too.
Shockwaves went around the industry when major label Atlantic Records recently announced 54% of their turnover was derived from digital music, this was amazing, because even as recently as 2006, this figure was commonly around 10%.
All in all- the future for legal digital music is rosier than many pundits think, far from being the death knell for the recording industry, its proving to be a great opportunity for the the smarter labels, those than can manage to cross the cultural divide and embrace the tech revolution, they might yet even end up emerging stronger.
Heres the TV ad campaign which the UK DVD industry is running to dissuade people from downloading bootleg films on DVD:

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