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A Year After Radiohead's Gamble, Where Do We Go Now?


09/26/2008
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(Guest Editorial) We are pleased today to present you with a guest editorial from someone who is in the trenches of the digital revolution of the music business. While the traditional music business is still largely stuck in a 20th century mindset and fighting the digital future while they should be embracing it, the indies are looking at ways to harness the change and opportunities of the changing landscape, so they can lead the music business into the 21st century. Alex Grange is the CEO of a company that is taking on conventional thinking and trying to open the doors for unsigned artists to buck the system and succeed. Time will tell is he will be successful but today Alex give us his vision for the future of the music business.

"Radiohead revisited: how their unorthodox release kick started the digital distribution revolution" by Alex Grange: October 10, 2008 marks the one year anniversary of Radiohead's "In Rainbows," which was initially released as a digital download, and immediately thereafter, as a standard CD. The album was released in North America on January 1, 2008. In Rainbows was Radiohead's first release after the end of their contract with EMI and the end of the longest gap between studio albums in their career.

In Rainbows innovated a new way that music could be distributed online. This was a release that smacked the face-of convention, and took a bold step towards the future of independent distribution.

Some say it was brilliant. Others like Trent Reznor called it a "Bait and Switch." Whatever the case, now in its aftermath, we are left with the burning question: what is the future of music distribution? The simple answer of course is, "it is always changing."

Radiohead revolutionized the independent distribution model. By allowing listeners to determine the value of their blood, sweat, and tears, our very consumerist society was turned on its head. Radiohead offered their album online for three months at an open rate.

In the spirit of experimentation, people were encouraged to pay what they thought a fair price would be for the download. According to ComScore, many listeners offered approximately $6 for the CD. Some priced the album lower, some substantially higher, and yet others deemed downloading the CD at no cost was their right as a Web user.

Radiohead is not the first band on the planet to exploit the promises of the Internet and online distribution, but they were the first world renowned rock stars to do it. As one of the first major label bands to kick-start the model of online distribution, Radiohead's unprecedented experiment raised discussion in the music industry about the viability of the Internet as the latest musical distribution tool.

Radiohead's bold rejection of a dying model of distribution for their music cleared the path for indies, unsigned acts, and even more seasoned pros, to follow suit and to turn to the Internet monetization model.

The online music monetization model is not without frustration or peril. The traditional music distribution channel and record companies are worried that they are losing a huge market share to online players—which they are. According to the International Federation of the Phonographic Industry (IFPI), digital music sales generated around $2.9 billion in revenue in 2007, up roughly 40 percent since 2006. Tracks are now available through over 500 legitimate online services, representing 15 percent of the total global music market; and there is no sign of it letting up.

IBISWorld Senior Analyst Mr. George Van Horn anticipates, "an increase of up to 25 percent market share within three years," as quoted in a recent press release.

As a result of increased demand for digital music, fights and disputes over copyrights and fair use abound. Peer-to-peer music sharing channels unleashed a fury of lawsuits from the RIAA. Individuals and students became victims of these lawsuits, in an effort to stamp out infringement. This dispute rages today, becoming more volatile, and far reaching.

Cracking the code to online monetization of music, while retaining the artist's publishing rights, seemed as fruitless as the effort to untie the Gordian knot. But the rogue and rebellious spirit of the independent music distributors—a.k.a. the artists— welcomed this paradigm shift. The opportunity finally emerged for artists to chart their own course, and steer the direction of their own careers. It appeared as a breath of fresh air to the talent of the industry.

The future revealed. About the same time artists tasted freedom from the shackles of the music industry monoliths, an epiphany occurred within the souls of social media site creators around the world: what if we could take some of these unsigned artists and indie acts and give them an opportunity to commercialize and monetize their music while exploring the major record labels, without fear of losing their publishing rights?

There would be no conflict of copyrights. Independent, unsigned artists could receive critical airplay on a global scale while shopping their sound to majors. In the process, they could stash a little cash in their pocket through the sales of compilation albums to major retail chains.

Therein lays the combination to the digital lock. The music distribution revolution had begun, and with it, the online independent distribution channel for unsigned and independent artists emerged.

Some online sites have combined traditional tactics of receiving commercial airplay and interest from record labels, and at the same time, exploit the Web 2.0 social networking tools to make it a profitable gamble for unsigned acts.

One of the most prominent newcomers in the field of social networking through music is Pure Play Music. Pure Play Music is a socially networked, online music portal that shops indie and unsigned artists for commercial play and major label pickup.

Pure Play Music provides exposure to indie artists through its various channels of Internet broadcasting, including six satellite radio stations worldwide. These satellite stations provide artist exposure, while allowing artists to maintain 100 percent of their copyrights; a heated topic these days.

Beyond that, Pure Play is leveraging its partnerships with retailers across the globe by offering compilation albums of their unsigned artists to retailers at a fraction of the conventional cost to the retailers. These retailers would otherwise be required to purchase signed licensed music at a much greater cost. By these standards, unsigned acts get commercial play worldwide while retailers catch a break financially.

People are definitely starting to get it. In addition to Pure Play, Last.fm is another avenue for indies and unsigned artist to monetize music online. Over and above providing a community of new music influencers, they offer an Artist Royalty Program that pays out their artists directly. Unsigned and independent artists can sign up to earn royalties from on-demand plays and Last.fm's streaming radio.

Sites like MySpace, Facebook, Bebo, Ilike, and Imeem have also gained more solid ground. Let's not forget the white elephants in the mix, iTunes and Amazon, as among the myriad of companies which have dug the trenches of the online music industry, challenging traditional distribution channels.

Radiohead may not have pioneered the online music distribution revolution, but they sure put it on the map as a viable marketing channel for artists to monetize their own music. Radiohead lead by example, and the indies followed.

The artists profiting the most from Radiohead's bravado are the indies and the unsigned acts. Since the Internet's release of In Rainbows, online social media sites have jumped into the fray, helping to iron out the kinks and establish a new working model for unsigned artists and their fans.

Through the efforts of Pure Play, Last.fm, and a host of other sites, the road is slowly being paved to a new era of distribution—an era where the indie and unsigned artist can finally begin to make a living.

About the author

Alex Grange is the Chief Executive Officer of Pure Play Music. Pure Play currently features and promotes over 6,000 acts from a total of 42 countries, all of whom have been vetted through the stringent Pure Play A&R selection and legal process. Artists grant Pure Play specific non-exclusive commercial rights to their music. The Pure Play website allows access to the main radio broadcast, 6 genre-specific music streams, on-demand music tracks, artist pages, business directories, news articles, store downloads, an international gig guide and numerous other features, all of which contribute to an average page view quantity per visitor only exceeded by a few established on-line communities.

Under development for launch for the end of 2008 is 'Pure Play People', the Pure Play social networking platform, believed to be the next generation of both social networking and radio broadcasting. You can read more about Pure Play music by logging on towww.pureplaymusic.com.



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