Entertainment value chains and why Robbie loves mobile

By May 9, 2008Music, Video

The future continues to look bleak for record labels as they are becoming less and less important to their artists. This is from Dave Cushman’s blog (tks to OpenGardens for the pointer):

Robbie Williams had made five times as much money from his deal with T-mobile Sony Ericsson in one year than he had from his record label.

and

He made most of all from touring (the because effect in full effect!)

Not only are record labels not the primary source of revenue for Robbie any more, they are also not his primary source of promotion (in Australia anyway….).

Interesting also that Sony Ericsson spent six times as much promoting Robbie’s latest album in Australia than EMI did.

As Dave explains it record companies are being dis-intermediated. Artists don’t need them to get to their fans anymore, at least not the established ones. And one could argue that Myspace is providing an alternative to their A&R function.

A few years ago it was impossible to see a music industry without labels – now that doesn’t seem like a totally unrealistic prospect.

I wonder if we might be saying something similar about broadcasters in a couple of years time.

In both the music and video industries the function of aggregating demand and managing distribution looks very different in a networked world.

  • Hi Nic, thanks very much for the reference. I think you are right about music being just one example of the disintermediation the network brings.
    Any form of media is defacto the middle layer, the mediator, and it has to understand it must find a new place to operate.
    One question I think helps define the issue for us is :”What do you do when you don’t own the user experience?”
    I have some views on where that positions the mediators, more of which you’ll find for example here:
    http://fasterfuture.blogspot.com/2008/04/who-owns-experience.html

  • Hi Nic, thanks very much for the reference. I think you are right about music being just one example of the disintermediation the network brings.
    Any form of media is defacto the middle layer, the mediator, and it has to understand it must find a new place to operate.
    One question I think helps define the issue for us is :”What do you do when you don’t own the user experience?”
    I have some views on where that positions the mediators, more of which you’ll find for example here:
    http://fasterfuture.blogspot.com/2008/04/who-owns-experience.html

  • Bart Stevens

    Nic,

    To put some VRM flavor in there.

    Let’s say your fans are able to express their possible intentions on how to interact with the band on a site which aggregates “intentions from fans”, or you as an artist put a “sign” on your site, that you are open to a certain set of relationships …

    Wouldn’t that be a great way for bands and promotors to connect even more closer to the fans?

    This would kill the record labels …
    (see also the discussion ProjectVRM has with the RelButton)

    Enjoy the weekend

    Bart

  • Nic,

    To put some VRM flavor in there.

    Let’s say your fans are able to express their possible intentions on how to interact with the band on a site which aggregates “intentions from fans”, or you as an artist put a “sign” on your site, that you are open to a certain set of relationships …

    Wouldn’t that be a great way for bands and promotors to connect even more closer to the fans?

    This would kill the record labels …
    (see also the discussion ProjectVRM has with the RelButton)

    Enjoy the weekend

    Bart

  • Hello Nic,

    I think that this is fascinating, and my particular interest is how what happens to music will eventually happen to games.

    I wrote a piece for the games trade mag MCV on this very issue, focusing not only on how the bands don’t need the labels any more, but how labels are losing all pricing power, because in a connected, convenient, world, it is the consumer, not the producer who sets the price.

    You can find the article here, if you’re interested.
    http://www.nicholaslovell.com/articles-lessons-from-the-music-industry-1.php

  • Hello Nic,

    I think that this is fascinating, and my particular interest is how what happens to music will eventually happen to games.

    I wrote a piece for the games trade mag MCV on this very issue, focusing not only on how the bands don’t need the labels any more, but how labels are losing all pricing power, because in a connected, convenient, world, it is the consumer, not the producer who sets the price.

    You can find the article here, if you’re interested.
    http://www.nicholaslovell.com/articles-lessons-from-the-music-industry-1.php

  • It’s true that labels are not needed anymore. The future for the artists is making a net-community around them. For example 50cent has realised this and he is using cleverly tools like Ning.com and Ustream.com. Especially when they are free tools…

    And it’s not only bringing your fans together but it’s also making them follow your everystep, because otherwise they might miss “something important”. And what is better place to do that than internet.

    Another thing that makes your fans even more attached to you is letting them see the whole process how the songs are coming together. For example if you are a songwriter you might do the next thing:

    1. Give away the first version of the song for example without words and only guitar and humming
    2. Give away the next version with chorus finished, still guitar and singing only
    3. Give the raw version of the full song with guitar and vocal, maybe some mistakes still…
    4. After getting to see how the song starts to take its form you can sell the full song for them and they will buy it!!! The good thing is that the earlier versions are great content to your community site and it’s clever way to get the fans come to your site more often.
    5. And ofcourse the more engaged fans you have the more they will want to see you live and you will make more money again.
    6. And the more people will come to your gigs, the more advertisers are interested.

    Broadcasters will find their way too somehow…

  • It’s true that labels are not needed anymore. The future for the artists is making a net-community around them. For example 50cent has realised this and he is using cleverly tools like Ning.com and Ustream.com. Especially when they are free tools…

    And it’s not only bringing your fans together but it’s also making them follow your everystep, because otherwise they might miss “something important”. And what is better place to do that than internet.

    Another thing that makes your fans even more attached to you is letting them see the whole process how the songs are coming together. For example if you are a songwriter you might do the next thing:

    1. Give away the first version of the song for example without words and only guitar and humming
    2. Give away the next version with chorus finished, still guitar and singing only
    3. Give the raw version of the full song with guitar and vocal, maybe some mistakes still…
    4. After getting to see how the song starts to take its form you can sell the full song for them and they will buy it!!! The good thing is that the earlier versions are great content to your community site and it’s clever way to get the fans come to your site more often.
    5. And ofcourse the more engaged fans you have the more they will want to see you live and you will make more money again.
    6. And the more people will come to your gigs, the more advertisers are interested.

    Broadcasters will find their way too somehow…