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Musicians Looking To Let Internet Replace Record Cos

Posted By Barry Ritholtz On January 26, 2004 @ 4:45 pm In Finance,Music,Web/Tech | Comments Disabled

real_world.bmp [1]
Graphic: Peter Gabriel’s Real World [1]

At least, that’s the headline which Dow Jones ran for this story. Most everyone else who ran this AP story used the tamer headline: Musicians Unveil Digital ‘Manifesto’ [2].

But I suspect that Dow Jones got the basic premise correct: A highly respected and intelligent pair of innovative musicians are making a power grab on behalf of artists. They are taking advantage of the general chaos in the space, and the apparent cluelessness of the big labels vis-a-vis the internet.

In other words, the music industry’s Hell just got a lot hotter.

Consider the players: Gabriel [3] is an extremely bright and creative musician. He has been a major innovator in his entire career, from recording with Genesis and on his own, to live performances, to social activism [4] (Human Rights, the Environment, his association with WOMAD [5]) to his music business savvy. Gabriel owns recording studios, is a co-founder of the digital downloading service “On Demand 2 [6]” (OD2); He even founded his own label RealWorld [1].

If you followed Gabriel’s career — and his music — over the years, than you know that he is not a mainstream thinker. I have a sneaking suspicion that Peter is a disarmingly charming negotiator –both formidible and clever. Now, along with his cohort, Brian Eno, the Music Industry’s nightmare may have just gotten much worse.

Gabriel & Eno present an opportunity to turn the classic rocker cliché on its head: Think of a group of stoners, signing anything their label presents to them, while corrupt agents and business managers bleed them dry. Now imagine the polar opposite: that’s Gabriel & Eno. Long term survivors of the industry, they are smart enough not to confront the industry head on — they certainly do not want to turn this into a holy war. Instead, they are proposing a set of changes — incremental in appearence — which will gradually reduce the power of the record labels in favor of the musician. Gabriel is smart enough to retain a role for the labels, primarily that of marketing. That makes their model a compromise between the anarchy of P2P, and the disintermediation of a “labelless” pure internet model.

This may ultimately change the economic dynamics of the industry, reducing the role of the labels. Eventually, the changes could be dramatic.

CANNES, France (AP)–Peter Gabriel and Brian Eno are recruiting other musicians for a provocative online experiment: Since the Internet has changed the way fans buy and listen to songs, they say, why not transform the music itself?

The two independent musicians have dreamed up an online alliance for musicians, and they hope to launch within a month. By taking record labels out of the equation, artists could put downloads online themselves, becoming their own retailers and setting their own prices. They call it the “Magnificent Union of Digitally Downloading Artists” – or “MUDDA [7]” for short, which has a less lofty ring to it. On Monday, Gabriel and Eno handed out a slim red manifesto at a huge dealmaking music conference in southern France.

Do you have any doubt that what these gentlemen are proposing is anything short of a major revamping of an industry? Than read on:

Gabriel, who has his own label, Real World Records, said he isn’t trying to shut down the record companies – he just wants to give artists more options. “There are some artists who already tried to do everything on their own,” he said, adding that they often found out they didn’t like marketing or accounting. “I think we believe there will be all sorts of models for this.”

One band that has found its niche online is the jam band Phish, which sells downloads of its concerts at www.livephish.com. The band’s relationship with its devoted fans is often compared to that of the Grateful Dead, and the site is another chance for close contact. But it also made money: $2.25 million in sales since 2002. What’s driving the movement is the success of legitimate download sites such as Apple’s Internet music store, iTunes, which sells songs for 99 cents a pop in the U.S.

Gabriel co-founded a European company, On Demand Distribution, which runs legal download sites in 11 European countries. The company would provide the technology for MUDDA, though Gabriel and Eno are looking for online partners.

Stay tuned . . .

RealWorld [1]


Musicians Unveil Digital ‘Manifesto’ [2]
Associated Press, 1/26/04


What Peter Gabriel gets out of Davos [8]
By Tim Weber, Monday, 26 January, 2004, 09:04 GMT
BBC News Online business editor in Davos


Gabriel to launch musicians’ union [9]
By Tim Weber Friday, 23 January, 2004, 17:19 GMT


Musicians to Use Internet To Bypass Record Labels [10]
Associated Press


Musicians Looking To Let Internet Replace Record Cos [11]


Just Say ‘No’ to Record Labels [12]
Wired, 03:12 PM Jan. 26, 2004 PT


Article printed from The Big Picture: http://www.ritholtz.com/blog

URL to article: http://www.ritholtz.com/blog/2004/01/musicians-looking-to-let-internet-replace-record-cos/

URLs in this post:

[1] Image: http://www.realworld.co.uk/index/flash/

[2] Musicians Unveil Digital ‘Manifesto’: http://abcnews.go.com/wire/Entertainment/ap20040126_1514.html

[3] Gabriel: http://www.petergabriel.com/biog/

[4] social activism: http://www.witness.org/

[5] WOMAD: http://womad.org/usa/

[6] On Demand 2: http://www.ondemanddistribution.com/

[7] MUDDA: http://www.mudda.org/

[8] What Peter Gabriel gets out of Davos: http://news.bbc.co.uk/1/hi/business/3428437.stm

[9] Gabriel to launch musicians’ union: http://news.bbc.co.uk/2/hi/business/3424483.stm

[10] Musicians to Use Internet To Bypass Record Labels: http://online.wsj.com/article/0,,SB107516464904012346-search,00.html

[11] Musicians Looking To Let Internet Replace Record Cos: http://online.wsj.com/article/0,,BT_CO_20040126_006186,00.html

[12] Just Say ‘No’ to Record Labels: http://www.wired.com/news/digiwood/0,1412,62050,00.html

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