Wednesday, January 02, 2008

The First Must Read Article of 2008...

... was actually written in 2007 - it just took me some time to read it. The article entitled "David Byrne's Survival Strategies for Emerging Artists — and Megastars" appeared in Wired Magazine and was actually written by Mr. David Byrne himself - not a bad source to give you insight on the music business. Some interesting tidbits I learned from reading this article:
  • David Byrne does NOT think the music business is dead. It's just changing and we can all agree that is a good thing.
  • An artist may earn less from an album with iTunes than with a traditional CD. This suprised me quite a bit but it makes sense. The record label gives the artist the same cut. And since digital downloads cost less than CDs it makes sense that their adjusted margin won't come up more positive than it was before. Record labels aren't exactly practicers of the "share the wealth" mantra.
  • For an average $16 CD the artist makes $1.60 (vs. $1.40 on iTunes), the label makes $1.76 and the a store makes $0.80. I remember going to Best Buy in 2002 to buy the new Johnny Cash album and was both angry and confused when I couldn't find it on the shelf. I asked the clerk and he (after not knowing who Johnny Cash was) looked it up in their system and found they already sold both copies they had. Only two copies? Now I understand why. You aren't going to stock an entire store with CD's you think won't sell (and by think I mean told by the record labels) in the hopes I stumble in there and they make 80 cents on me.
  • Less music is purchased today and more is digital. No surprise there.
  • Even larger record labels (not the huge ones but ones I easily recognize) have only a dozen or so employees. It makes sense but I always envisioned a larger organization.
Please read the article if you're interested in the music business and how it impact both music and business. While you're visiting Wired also check out David Byrne interviewing Thom Yorke, and a great article on the alternate reality game surrounding Nine Inch Nails' Year Zero "marketing" campaign.

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