Music industry is backward & economically suicidal

Simon Indelicate, from The Indelicates, tells ORGZine about his experiences in the music industry and why the traditional model for record companies is out-dated

Image: All rights reserved by The Indelicates

Tell me what Corporate Records is all about?

Corporate Records is the record company we started in order to release our second album, ‘Songs For Swinging Lovers’. As well as handling the manufacture and sale of physical music (largely high-end, high quality special edition releases) it operates a web content-delivery platform that anyone can sign up and use for their own releases - selling music digitally on their own terms.

What made you want to start Corporate Records?

The company came from our experiences of being a ‘signed’ band and the astonishingly backward, wasteful and economically suicidal practises that were (and remain) evident in all corners of the music industry. It’s a long and funny story - but, in essence, the music industry seems to achieve the opposite of it’s stated aim: it is a great big obstacle that prevents people who make music from selling it to people who want to listen to it while wasting lots of money.

We figured if we did the precise and clinical opposite of everything we’d seen anyone in the industry do we would probably do okay. So far, this approach has been successful.

What’s the plan to grow Corporate Records?

As far as the online business goes, there are other companies (mostly American with much more investment and silicon valley cred) doing a similar thing so we are looking to develop more engaging ways for users to browse the site and find the brilliant music that people have uploaded.

We see ourselves much more as a record label than as a content-delivery-system. In the next few months we'll be making general site improvements and added functionality. But beyond that, we’re looking at various things to build the community that exists around the company, and connect fans with new music. If that all sounds vague it’s because I’m being deliberately secretive - just to be clear!

Tell me a bit about The Indelicates and your experience with more traditional record companies?

It’s hard to go into specifics without being mean about people who are essentially decent. I could draw on a wealth of anecdotes - panicked phone calls from executives who’ve only just realised that you can rip music from youtube, bitter complaints about illegal post-release filesharing from people who deliberately leaked albums pre-release - to illustrate the endemic failure of the industry to engage with technology. But I think the case is made and proven by the briefest glance at the internet and most labels’ presence on it.

It’s probably worth noting that, discounting the uncompromising positions of paid lobbyists from the BPI, these are not evil or stupid people. It is just that the industry they built and did great things with no longer has an economic foundation. It used to be that the recording, manufacture, distribution and promotion of recorded music were enormous costs that prohibited entry into the market by anyone without serious financial clout.

The technology of the last two decades have now almost eradicated these costs. The ability to effectively record or synthesise music requires only a computer and an internet connection. Manufacture and distribution of physical media is unnecessary when the encoding and transfer of digital music is free. Effective promotion costs only time and the right twitter contacts. Costs have collapsed. Consequently the supply of recorded music has exploded.

You could legally listen to a new, brilliant album every day without ever paying a penny or hearing anything signed to a label just by browsing Corporate Records, myspace, YouTube, Bandcamp, CD Baby or any of the other services that exist in the space between music-makers and music consumers that used to be occupied by the record industry.

 

So have these record companies have been too static in dealing with the changing environment?

There is enormous supply and around the same level of money that music consumers have available to spend, that is, the same level of demand. Consequently the price of an hours worth of music has had to fall - the failure of the music industry has been to attempt to maintain the old pricing (£8-12 per 45 minutes) as before in the face of a changed economic reality. In the face of this filesharing and it’s persecutors’ spurious link between illegal downloads and lost sales are the merest distractions.

Value in music comes from engagement, participation, quality - it’s impossible to put a general price on these. It’s a social algorithm that returns a different result for every potential transaction. As such, we think the Pay-What-You-Like model does a good job of identifying the right price for the market. Similarly, selling high-end, high-value special editions is an efficient response to the market conditions. Selling plastic discs with data on them in dull boxes for about a tenner is not.
 

 

As an artist on Corporate Records yourself, what’s your experience of the Pay-What-You-Like option? Do many people download for free?

We consider our use of it a success. A lot of people did download for free, but many people also paid nearly £80 each for a special edition. Furthermore a few paid £300 for a super special edition which involved us coming to your house, playing the album for you, recording the performance then signing a contract transferring all rights in the recording to you, thereby creating a limited edition of one. Capitalism requires me to point out that this deal is still available.

As I say, I don’t think a free download equates to a lost sale - so it’s hard to say if there were any downloaders who would have paid us who didn’t - but we were thrilled with how well it went.

 

Were you able to cover the costs of production?

Our experience is that yes, production was covered. While I think that you can produce perfectly serviceable music at home for very little (especially electronic music) there are things we wanted to do that really needed a studio and the costs were recouped.

Ultimately, our main purpose in music is to not have to stop. As far as we’re concerned if we’re able to keep going, to keep travelling to shows and most of all to keep making records then we’re doing fine, and the money we made from the last album has just about paid for recording the new one. We recouped our costs and I think that’s more than a lot of culty indie bands with low end record deals can say.

That said, there are no guarantees and it’s not as simple as just uploading and watching the stats counter go up. There is a lot of work involved. Part of replacing the traditional record company with a direct artist/fan relationship is that you have to get good at doing the things that record companies used to do for you.

I think it also helps (and I’m not making any claims for myself here) if you are producing music that is, in some way or another, different from the competition. The new environment will reward those who are a thousand people’s favourite band more than those who a million people think are alright.

 

What are some of the other obstacles you have faced?

We tend to have issues every time we try to do anything in a traditional way. We had complaints and problems when we made the decision to block some of our releases in Germany while we talked to our (actually, really excellent) label about what they wanted to do. I think that was a mistake as it contradicted everything we’d been saying about free data, and pushed people onto proxy and torrent sites when our whole thing was that they didn’t need to bother.

We had an issue when a few of our tracks somehow found their way onto a list maintained by a company employed by a major label to harass youtube and soundcloud users a few people got horribly aggressive takedown notices and we spent a few days on the phone sorting it out (and I wonder how often this happens). We find that there isn’t an air of excitement or the corresponding level of investment in new business models in the UK that people tell us exists in America and this has been a bit of a drag.
 

 

As the internet makes music more accessible and cheaper for consumers, what impact do you think this will have on live music?

Honestly, I don’t think the argument that piracy will cause a general upsurge in revenue for live music is a convincing one and I always wince when I hear it. Live has huge hidden costs that go up and up with the scale of the performance, and the business model for touring is to make enough money from each show to pay for getting to and putting on the next one.

It’s not unusual for bands quite a lot a bigger than us to tour for three month stretches, come home and immediately restart their old jobs having only made enough on the tour to survive the tour itself. The escape velocity of fame needed to play big enough shows that the costs pulling you back are negated by the revenues thrusting you forward is only reachable by a tiny fraction of artists. Also, the idea that you can raise the value of something by flooding the market for it seems to make little sense.

As far as I’m concerned the case for a free internet, digital rights and an innovative approach to music sales that reflects market conditions is made already without an appeal to the boost to related revenue streams. I’m content to look at the state of music and say, this is how it is, it’s not reversible and that’s a good thing.

 

Do you believe this is the future of the music industry? And if so, how long before we start to see the mainstream shift?

I don’t know and I don’t think anyone does. I do think that the future of the industry will be forged by those who see the way things are now as an exciting, creative revolution rather than a scary, destructive crisis. If we’d formed the band in 1985 instead of 2005 we might, maybe, possibly have been among the vanishing minority who were ever able to record their music well and distribute it on a large scale and made a bunch of cash too. Much more likely is that we’d have remained among the vast, impotent majority - frustrated and even poorer than we are. I choose now - and the future.

 

Thomas Quinn, ORGZine editor