Canadian Music Week

Artists Labels Hangin’ Tough at Canadian Music Week 2011

Adam Grant

there's one thing learned from covering the first day of Canadian Music Week 2011, it's that the music industry appears to be at war with itself about how to manage and take advantage of the digital world. The businesses that sign artists and sell their music want to know how to gain more revenue from digital releases, while other factions are encouraging artists not to worry about the business end of the equation, and to use new technology to make themselves more money. It's very much an industry divided.
At the "How to Outsell a Major Without a Label" conference, the point that stuck out the most was that when an artist sells an album on iTunes for $9.99, he can see a return of $7. However, if that very artist were to sign away his licensing rights and master recordings to the record label (affectively losing power in terms of how much he can make from the sale of a recording), he would receive around $1.49 for a CD that would sell for $17.98 at Wal-Mart. If anyone wants to understand why record labels are a tad nervous about the digital music revolution, this is likely one of the major reasons.
With that in mind, we can now understand why music industry executive types (at least some of the ones that came out for CMW) are calling the CD a dead format; without the CD, they're financial cut dwindles significantly. Sure, major labels still get a cut of digital sales from their signed artists. But as time passes and artists become more knowledgeable about how to get their music out through digital channels that don't limit profitability, there's a chance that major record labels could become obsolete. No one said this straight out at the event, but that vibe was certainly present.
So what can a label do to combat this? Aside from signing very profitable pop acts like Justin Bieber or Lady Gaga, they can find better ways to promote and market music that's released digitally by their artists. one idea tossed out during the "Digital Summit 2011 and Beyond: What Does the Next Decade Have in Store?" session was to strike deals with mobile companies to provide devices with pre-loaded music. It's a concept that's already been tried with things like music-related games (a Nokia XpressMusic phone released back in 2009, for example, came with a the game Guitar Rock Tour) and portable multimedia players, like SanDisk's slotRadio initiative that includes mini players with microSD cards loaded with a specific artist's music, or tunes that fall into a specific genre. This could be a way for labels to still make money without having to necessarily rely entirely on the consumer and his spending habits; they'd get paid based on the arrangements with the mobile phone maker and/or wireless carrier.
While the debate over how to make the most out of distributing and selling digital music was a large topic of conversation at CMW, another was how artists can create their own fame without relying on said labels. According to those on the "How to Outsell a Major Without a Label" panel, it's all about going viral. Get on YouTube, take advantage of Search Engine Optimization (SEO) tactics, and go hard on social networking. It was recommended that Facebook should be used as the primary social network to stay in touch with fans, while Twitter is more of a place to grab industry attention, if that's what is being sought. Combine those efforts with online mailing lists, more interactive Websites, and exclusive online prize giveaways, and artists should be able to build a name without the assistance of a label. (Of course they'd still need to find ways to arrange and handle distribution of their music through channels that would generate profits, handle live concert events, etc., so the business side of it isn't totally irrelevant, even if artists choose to keep labels at an arm's length). It was also suggested that in order to do this right, every band needs to know that having a person dedicated to online fan interaction is about as important as having a good bass player.
All told, label types appear to be in survival mode at CMW, while musicians are being given the opportunity to feel optimistic about being able to make a career in music happen on their own terms. For the first time in a long while, it seems as if the musicians of today may have a chance at retaking the industry that's been profiting off their talents for decades.
On a brighter note, the first day of Canadian Music Week 2011 featured a surprise appearance by New Kids on the Block member Jordan Knight. Although he wasn't partaking in any of the sit down discussions about the state of the music industry, he did take the time to speak with Marketnews about what he sees happening to the music industry in the future, his love for Canadian audiences, and of course, the boy band that started it all, NKOTB.
Stay tuned for full video coverage of Canadian Music Week 2011; and see our full video interview with Knight below.