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What Is The New Model For Artists In 2011?

This week HMV announced they’re closing 60 stores due to dismal Christmas trade.

The global Recording Industry has been in decline since 2000. It’s partly because they failed to predict the huge decline in recorded music sales and so were not set up to manage the significant upheaval in a business model that had been in place for the previous 50 years. To be fair, I don’t think many industries were.

When I was at Sony Music I attended a Senior Management meeting when someone  presented some market research on the global value of touring and merchandise. In the research he had asserted that to get touring rights from artists Sony would have to give up a percentage of recording royalties. When his team compared what they would gain in touring income versus the loss of CD income, they concluded they were better off sticking with the CD business. Of course, had they accurately predicted the global CD business was to fall by 50% then naturally their conclusions would have been radically different. It was a severe miscalculation which is a small, but significant, reason they were not prepared for the rapid re-shaping of the industry.

The new model in the mid-term is this: Live touring is at the core. New software will be developed to enable more efficient ways of booking & promoting tours and growing a fan-base via mailing lists and fan ticket incentives. Subsequently, the band & tour agent invest in new recordings. Music distribution is handled by digital services such as The Orchard. CD’s are sold similar to merchandise to the artist’s most ardent fans. Promotion is a collaborative effort between band and Touring Agent. The “Touring Agent” is a combination of Booking Agent, Promoter, Ticket Agent and Tour Manager. They will emerge to assist artists build their live audience.


About Neil

Neil Cartwright founded Million Media in 2006 with the aim to help people understand digital marketing and use it to their advantage. The vision hasn't changed but the technology has.

One comment on “What Is The New Model For Artists In 2011?

  1. Nick Levine
    January 7, 2011

    Some good points but not sure I agree with the touring aspect in the short/medium term.

    Live music has taken a hammering this year, with many big artists having to discount ticket prices significantly.

    The rise of social shopping sites for cultural experiences like Scenely suggests that this now also be translating to non heritage acts.

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This entry was posted on January 6, 2011 by in artists, Digital Marketing, Event Marketing, music.
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