Big Record Companies? Disposable.
This morning's Wall Street Journal had a short article (not available online) about major bands refusing to re-up with their labels once their current contracts expire. Artists including Prince, Jackson Browne, Pearl Jam and Ice Cube have basically told their erstwhile labels that they are still willing to deal with them-but this time on the artists' terms. This means turning down huge advances but keeping copyright and a bigger chunk of the overall take.
The article is weak for a WSJ piece, because it doesn't say much about how this state of affairs has come about. It's certainly true that radio station playlists aren't the only ways to build hits these days, as the article notes briefly and then changes the subject. The Internet builds word of mouth in ways of which the writer may not be aware, or may not want to admit, like P2P piracy. It's not just Web sites anymore.
That yee-haw doofus Garth Brooks (who soiled himself in my esteem by demanding the outlawing of used CD sales) dumped EMI, recorded some new material at his own expense, and then cut an exclusive deal with Wal-Mart to sell it to his core constituency. A doofus, perhaps, but one who apparently knows who buys his CDs, and where.
Beneath all of this change lies something that the WSJ didn't mention at all: It is getting ever cheaper and easier to create digital music, and physical CDs are no longer the only way to deliver it. (Stamping physical CDs can be done more cheaply and in smaller quantities than ever before, too.) The technical expertise required to record, mix, and cut an album has grown more common as the price of the equipment has fallen. My sister and brother in law have an entire recording studio in their basement and make decent money publishing specialty music under their Dodeka Records label.
All of this prompts one to ask: What value do gigantic record companies add to the music industry? They used to provide the immense capital investment it took to create, publish and promote new music, but as the required capital has fallen, their importance has steadily shrunk. They're not irrelevant yet (as some are already saying) and won't be until the majority of all music sales are downloads or direct CD sales. The only thing keeping them relevant is their lock on the conventional B&M retail channel, and while that will go on, the size of its piece of the overall music sales pie will continue to fall.
Ok. Now go back through this entry and swap out "books" for "music." Book publishing seems to be on much the same path as music, if not so far along here in mid-2006. Linotypes, IBM Composers, boards, waxers, and physical halftone screens are history, and have been since the early 1990s. The capital investment required to create a print-ready book image is now $2000 on the outside, and the skills required for the job are a straight-line extension of word processing. If you know Word, you're halfway to InDesign, PageMaker, or any other layout app. Printing costs have plunged due to better presses, higher productivity, and competition from overseas printers, particularly in China.
Over time, authors who tire of watching horror scenarios like The Incredible Shrinking Royalty Rate will choose the new path, releasing books as ebooks and keeping older titles in print through deals with smaller, POD-based publishers. It's already happening, and the similarities to the music business are striking. I've asked before and will continue to ask: What are big publishers actually for?
Remembering, perhaps?