The panic of the falconers

So, a question - why do bands need music labels? I'd have thought that the answer is to promote and distribute the band's music - the band does not itself have the resources to fund a multi-million pound marketing campaign nor the facilities to produce CDs and ship them to Tower Records, so it lets the label bear the risk of that up-front cost and accepts in return merely a percentage of sale proceeds. This made sense for the band in the old world where attention was abundant and could be bought via marketing, and where distribution was about the shipping of physical CDs. As music moves online, it makes less and less sense for the artist.

Now Universal Record's CEO Doug Morris blasts YouTube and MySpace (Mercury News), calling them copyright infringers and essentially demanding tens of millions of dollars in reparations. Terry Heaton calls his rant "more of the same"; Jeff says that "you can't teach an old moghul new tricks". Indeed. But there is the potential for something new to emerge out of this rant. Universal provides two economic benefits to its artists - marketing and distribution. Distribution is increasingly irrelevant - we buy tunes online, we do not buy CDs, so sooner or later the artists will be able to bear production and shipping cots (of zero) on their own. As for marketing - well, by fighting YouTube and MySpace Doug Morris is setting up Universal as a block on marketing the bands in Universal's stable. That's not delivering a positive benefit to his guys.

Scott Karp says that this is about control. Of course. Universal risks shovelling over its power to YouTube and MySpace and will fight that to the last breath. But the control here is really with the bands and the audiences, and the bands don't have to keep signing contracts with the music labels. Universal has fallen into the familiar trap of thinking the audience is its enemy. Not so. The new economics of music promotion and music distribution are its enemy, and these things are outside its control. The benefits that music labels provide to bands are simply evaporating in the face of technological and consumer change. As the gyre widens, the falconers panic. The steps music labels are taking to defend their intermediary position actually serve to worsen this problem. The next Arctic Monkeys simply won't sign on the dotted line because they'll get more attention, and make more money, on their own. That's the future the music labels are facing, and resisting - simply being cut out of the value chain because the benefits they used to provide no longer matter.

Update: Today Om points us to Greg Costikyan's Manifesto Games, the gaming version of this long-tail vision for creative engagement and distribution; and in comments, Matt Hanson of A Swarm of Angels shares his vision for a new, distributed model for creating films.

Comments

[Matt]

Great comment. Everyone focuses on the music industry because it is more flexible, easier barriers to entry, and bands are already going for it.

Movies are a different proposition. The finances, and barriers to entry are huge, and the studios control more of the industry.

That's why I'm looking to bypass the whole thing with A Swarm of Angels.

I hope you check it out and tell me your thoughts.

[Seamus McCauley]

Matt - yes, I've been watching your Swarm project for a while, it's fascinating. Myself and a few colleagues in the digital/publishing world in England were recently debating getting involved. I guess what interests/concerns me is whether it'll really tap the so-called wisdom of the crowd or whether the profile and creative experience of some of your bigger-name backers (Warren Ellis springs immediately to mind) will end up steering the thing.

How did the .net write-up affect take-up?

Also...I'd suggest that the barriers to entry are artifically huge because Hollwood majors on stars and CGI and they are IMO vastly more expensive than they're worth. It's possible to make a brilliant film for almost nothing - see obviously Aronofksy's "Pi" but also stuff coming out of the film festivals such as Channel101 and the Angel Film Festival in London, plus foreign films such as Turkey's Valley of the Wolves that come in vastly under a Hollywood budget. What would you say to the idea that the studios control a lot of things that a filmmaker can really do without?

[Matt]

The reason I wanted the project so open at the start (2 scripts not written!) -- so unpackaged -- was to make sure I got that input from the community in the forums.

Angels have already inputted directly in the script outlines, and will do so more once they are transferred to a wiki (this is all moderated of course so it doesn't veer off course). I've also had other ideas and input from 'ordinary' members that are being taken up.

The advisors are just that: advising and taking a hands-off approach.

This is all evolving as we go along - people don't know what the rules of this model are yet, as we are creating them - so it is a question of encouraging and eliciting input from Angels as we progress.

If you like we are talking about user-generated content funnelled and filtered through a director's (my) eye -- just as you would on a normal film production -- but this is democratised and global.

Re: promotion
Each promotion and blog sphere we hit fuels a wave of signing -- .net is bringing people in, but generally online promotion is definitely working better at this stage. Currently, it's a question of building the Swarm up steadily to make sure the community is balanced and doesn't overheat. I have a post on this at www.aswarmofangels.com re: overbuilding/overpromotion.

In terms of the structure of Hollywood - I talked about this in my book, The End of Celluloid a couple of years ago; the blockbuster structure is imploding under it's own weight - more fractured narratives and hybrid genres will be generated by the debris!

So yes, the transformation is taking place but it needs people to put their faith in projects that are moving this forward, trying to invent that future, like A Swarm of Angels. This is the only way you'll get a radical break from existing models as Hollywood has too many complicated contracts and vested interests to move quickly into the future.

In conclusion, we are now over 700 members, nearing our target for the 1000 development community which triggers teaser media and heavy script development. So I hope you and your colleagues might join up before we hit the next target, and before we mainstream...