Indie labels, major labels, internet business models
Can you have a music platform that doesn’t include the major labels? That’s a big question. The majors are the ones still holding onto the business in the tightest way with the fiercest grip. And they have both the back catalog and the best artists. So saying that you could build some kind of music business without them seems counter intuitive. The money that these guys want for their content just doesn’t equate to a model that breaks even for an internet business. So how do you monetize profitably?
I suspect that there might be answer in pooling together a conglomerate of indie labels. That’s where it feels like the innovation could happen and where you wouldn’t have to negotiate with these sleazy greasy faux-mobster types staring at you with glassy-eyed corruption.
I’m thinking of a model like Hype Machine with a few different components and inputs. I think it starts with a couple key concepts. First, you get the content on the right revenue share. Don’t start with Sony and don’t start with Universal. Instead, I’d focus all of my time on major indies like Merge, Sub Pop, Touch and Go, Mute and a few others. If you can get Merge and Sub Pop, you’re in as far as I’m concerned. Plus, of course, you create some kind of templated ability for unsigned bands to upload their content in a formatted normalized way. That’s not too difficult. We’re circling around a couple of businesses now. It’s Hype Machine probably. It’s also RCRDLBL. Maybe it’s an extension of CD Baby.
Step two is to build a widgetable player. That’s really the key. A simple embedded widget that publishers can use to scroll through a content directory and create playlists of licensed content they like. Single songs or whole mixes. Whatever. The widget also has some ability to present visual advertising in conjunction with the playing of the song. That’s like the new MySpace music and it’s a good idea. Music bloggers, corporate websites, etc where they feel like they have a rich library of content to choose from and that complements their existing content.
Step three (maybe these aren’t in the right order or maybe they all happen at the same time) is of course reaching out to advertisers and convincing them that this is content they’re comfortable with their brand sitting next to. Maybe what this really is is Pandora. Right? You convince advertisers that for their purposes they need to let go of whether it’s a specific band that their advertising is sitting next to and instead get them to buy into these micro-genres that the weirdos at Pandora have created.
“Listen, Mr. Marketing Director at Coca-Cola, for your new youth-oriented site, don’t worry about getting Fall Out Boy. Instead pay us x and Coke will sit next to over 2,000 different bands all of whom have been broadly categorized as ‘hair driven whining with power chords’”
The money is coming from the advertisers for long tail brand distribution that happens in conjunction with a music delivery widget that is essentially an ad-supported player linked to an ever-growing database of content. And, again, the question is: can you get this thing off the ground with a couple major indies as content anchors (like Merge and Sub Pop) and not worry about the price gouging that the majors will try to enforce. And then hope/wait for them to go out of business.
RCRDLBL seems closest to this approach, based on how their site looks right now. But the point, of course, is that it shouldn’t be a ‘site’ but a widget that syndicates out across the ‘Net.
