Rdio Killed the Record Label Star

I was in middle school when I arrived at the conclusion that the music business was ultimately where I’d want my career to begin, with the goal centered on finding my way into a major record label. My ideal job was nothing unique. This of course, was during a time (early-mid 90’s) when music sales were never higher, and the music industry was robust and healthy. Oh how things would change…

After graduating high school I attended Syracuse University to study the music business. Over the next four years as I maneuvered between internships, booking shows and managing bands, I would watch the very industry I once glorified not merely implode, but leap off a bridge with a rock tied around its foot.

My freshman year of college would usher in massive changes to an industry largely stable for the prior 30 years. The proliferation of high-speed internet would bring about an era of media consumption in extreme volumes. The use of Peer2Peer networks would explode on campuses and record labels would see sales dive for the first time in a decade. The iPod was penetrating the market at unforeseen rates, redefining the music experience, and record labels were settling $75 million price fixing lawsuits while simultaneously vilifying their customers for downloading MP3’s they’d refuse to make legally available. By the end of the academic year, the iTunes Music Store had launched lending false hope that the worst was behind us.

Over the course of the next four years The Facebook appeared, record sales would fall off a cliff, labels would consolidate, and as the industry grew smaller it seemed that the only area of growth was in the sheer volume of music being shared and consumed.

After graduation day, sitting around with my friends peering off into the rubble that was the music business, a major label – the original end goal – was in fact the very last place I wanted to be. The internet had eaten the music business up and spit it out. I quickly realized the future of all media, not just music would be dictated by consumers and their interactions with technology. It’s for this reason I find myself at Glow, where I am able to leverage my understanding of the market place with the designers and developers who are constructing its walls.

Today, the music industry still has yet to recover. Record sales continue to decline, labels continue their layoffs and revenues are lower than ever. Bands have responded by incessant touring, saturating an already crowded market and the digital licensing world is in complete disarray. SoundExchange can’t seem to give away an estimated $9 million dollars in back royalties to musicians (and managers) who probably don’t even know it’s waiting for them. The industry is a hot mess. But the future of the business looks bright and here’s why.

New services, technology and digital platforms are constructing what will be the next iteration of the music business. As the pillars of this new music industry are put to soil, what will rise from the ashes is a robust business rich with content and revenue.

Today we consume all forms of content (video, articles, music and books) in higher volume. Our expectations are such that if we pay for it, we want it accessible whenever and where ever we may be. We want the ability to share it with our friends and experience it in groups. Until recently no legal model existed to support this behavior and arguably the technology wasn’t available. But consumer demand is what drives change.

iTunes addressed the demand for digital content but it did little to address the volume at which we were consuming.

How could I possibly afford to legally pay for the plethora of content I was exposed to online without going broke? Why would I spend that money if I couldn’t have it everywhere? My home, office, car, phone, in the park, on the subway…

Rdio, Spotify and MOG represent what has been the missing link in the digital revolution that devoured the music business. Since the introduction of the iPod nothing has transformed and redefined my music experience in such a pivotal way as Rdio.

I pay a monthly fee in exchange for access to nearly all the music I want, whenever and where ever I want it. It’s easy, organized, clean, headache free and most important… available EVERYWHERE.

In time, adoption of these services will increase, the pennies currently produced for participating artists will turn into dollars, and the $88 million distributed (in Q3) by SoundExchange for digital streams will grow to hundreds of millions.

In the not too distant future consumers will make purchases on Facebook as regularly as they do on Amazon. Managers and artists will begin taking control of their social properties, seeing them not merely as promotional platforms but as new revenue drivers and Donald Passman won’t issue a new edition of his famous book “All You Need to Know About the Music Business”, he’ll need to rewrite it from scratch.