The Future of Music: How to Save the Business

Rick Rubin, an expert record producer and musical pioneer, believes that he has the key (free sign up to view the article) to saving the music business. Due to recent events, it is apparent to Rubin, (and everyone with an IQ of at least 80), that record companies are currently lost when it comes to choosing a direction for their businesses. The fact is, however, that the traditional business model of selling records as a tangible object is obsolete. The industry has shifted from the tangible to the intangible, with Apple's iTunes leading the way as the new business model; one that is primarily based on the sale of song singles, rather than entire albums.

While record companies insist that the drop in CD sales is due to online pirating of recorded music, and it is certainly true that the decline can be partially attributed to pirating, Rubin believes that the change is the result of something deeper. He maintains that record companies for many years have been signing and developing artists for the wrong reasons, (as the cartoon on the right depicts), and that due to the recent shift in the industry, the “old way of doing things is obsolete.” In general Rubin feels that no matter what happens, the most important thing is to create great music that will influence and inspire people for “ages” and this in turn will lead to consistent sales.

Rubin's ideas certainly make sense, yet in general much more can be accomplished to allow traditional record companies to compete with, or at the very least, survive alongside Apple.

The most important first step is to abandon traditional distribution of recorded music. My personal message to record companies: STOP SELLING CDS! If consumers are not shopping for CDs in retail outlets, do not sell music in retail outlets. Rather, sell music in online music retail stores such as iTunes, music.com, and others.

Jeffrey Webber, another well known producer and professor of music industry at UCLA, spoke to a class I was in last year called “The Record Producer”. He put forth an interesting new business model for record companies that incorporates iTunes and the singles sales model. His proposition, and I am loosely paraphrasing here based on what I remember from a year ago, is that record companies should not only abandon CDs, but abandon albums altogether. For those unaware, recording contracts between record companies and artists, allow for record companies to commit to the funding of one initial album, with additional “options” (usually in the 3-5 range) to record additional albums after the initial release of the first album. Webber thinks it will be to the record companies' advantage to commit to only to singles, say three up front with options for more if the initial three are successful sellers.

In my opinion, this could make things much more efficient while saving money and producing enormous profit for record companies. All the record company has to do is send the singles to iTunes or another online distributor, pay a marketing and promotion fee, and provide the accompanying liner notes and album artwork to satisfy consumer demands.

One might ask, however, what happens for the small number of consumers who want to own the tangible object rather than the MP3? I believe such a consumer will have two options in that case: a) burn the album for oneself OR b) I propose Apple incorporates a service that manufactures and ships out CDs as they are ordered. Kind of like how Jack in the Box does not make its food until it is ordered. This would save record companies the trouble of wasting money on manufacturing CDs that will not sell.

It is apparent that what is taking place is a metamorphosis of an entire industry. The change is brought about by technology and its ability to promote globalization and ease of communication, (anyone heard of web 2.0?). As Rick Rubin so eloquently puts it, “the world has changed [...] the industry has not.” If people do not adapt to the change, the once great record companies will eventually fizzle out and smaller, more genre-specific, so-called “indie” labels will take their place. Not only this, with the recent advance in home recording technology, it is easy to see the artist as not only an artist anymore, but as a producer, recording engineer, and distributer as well. Essentially artists will take the sale of their music into their own hands – a process that has already begun. Due to recent technology, the ability to create and share music with others has never been easier, and if these changes do occur, it is plausible that a diversification and of music will ensue. Maybe genres will cease to exist as styles and attitudes are mixed and shared at an exponential rate. No one knows for sure exactly what will happen, but these are very feasible predictions of future events.

In a way, Rick Rubin is very wise in his claims that music - especially good music - is valuable and it is important to promote the advancement of musical ideas. And no matter what happens to the industry, music will always be present. It is therefore that what we need above all else is continued and lasting support for artists. We must cherish them and cherish their art because music, no matter how it is packaged and sold, is essential to our survival as human beings.