05-29-2012 01:30 AM
I thought this was a very interesting essay - I ran across it on longreads.com.
The writer is David Lowery, of Camper van Beethoven, a former quant trader, a former programmer, and husband to a concert promoter - a very bright fellow who knows a lot about both the tech and music businesses.
Plus, he's funny.
An important piece of his argument that overlaps with publishing is this: the old days (in music; I'd say this is still true today in books) featured some artists not getting paid enough - and many others getting paid too much. The music business bet on a lot of horses, realizing that not all the horses would come through.
The big money in music no longer wants to bother - it's more cost-effective to let Youtube and file trading define what's successful and make their money selling advertising impressions around and recordings of that music.
He's none too happy - as a musician - that Apple still gets 30% of the gross of anything it sells. As an Apple shareholder, he likes it, though. The risk that justified that margin when itunes was brand new doesn't exist any longer.
For a band trying to sell directly to its audience, that's a huge cut to give to Apple (or Amazon, or BN) just to avoid having a fan enter their credit card into a website - but fans are notoriously lazy, and they want to buy through the method they already have set up, not by a direct purchase.
The slice of his argument which seems weakest is the discussion of revenue from live performances. I can't see how the intertubes have much impact on that. In aggregate, live revenue is up, but tours are longer and crowds are smaller. To me, that has a lot to do with differences in how people decide they want to spend their leisure time and conflated with demographic shifts.
Still, a well informed and interesting piece.