Rebecca Black, Creative Destruction and the Music Industry

by Benjamin Domenech on 9:09 am March 18, 2011

The internet is full of mockery and loathing for thirteen year old Rebecca Black’s terribly annoying little song — which is a shame, because the music industry as it stands is likely to produce a lot more “singers” like her over the next few years. It just makes economic sense.

The new realities of the music industry generally elevate talented stars with niche followings, but it also provides an easier path to “success,” such as it is, for one hit wonders with a pedestrian, juvenile sound. It’s easier to become famous as being the butt of a tween musical joke than it is as a talented artist, and the money spends just as good. Young Ms. Black doesn’t seem to mind.

Let’s step back for a moment to consider how quickly things have changed for the music industry. Last year, Katy Perry had the top-downloaded single, with 4.4 million copies. Perry, whose audio talents are still unapparent to me, is a perfect encapsulation of the move from albums to singles as a metric of success — her album sales have been tepid, disastrous by the standards of just a few years ago, but her leveraging of singles has been superb.

Compare this to just five or six years ago. In 2005, Mariah Carey had the number one album with 4.9 million in sales. That’s half a million more albums sold, versus singles — a vast difference in terms of revenue and impact. To understand the difference in income from singles vs. albums, read this Billboard piece on how the money would break down as Gwyneth Paltrow prepares to record a country music album based on her new “Country Strong” film role (which actually looks pretty good):

Here’s the breakdown of the breakeven point based on our source’s numbers and Billboard’s math: Between the recording fund and the additional expenses, the project would have outlays of about $2.9 million. CDs and digital albums have a gross margin of about $4 per unit while $1.29 tracks have around a 60-cent gross margin and $0.99 tracks have around a 40-cent gross margin. Assuming Paltrow sells two tracks for every one album, and assuming track sales are evenly split between the two price points, her album would break even with sales of about 465,000 albums and 930,000 tracks.

That’s a high level to clear, and it’s one of the reasons that everything is getting flatter. The old studio model is being rejected in favor of direct downloads of albums from the source. Consider the experience of The Civil Wars, one of my favorite bands at the moment. Their personal label two months ago had nothing. Then Taylor Swift tweeted that she loved their music. The next day, half a million people had seen the video she linked, and the next week, The Civil Wars were the top download on iTunes. Think of them as the good side of the Rebecca Black coin.

This ongoing example of creative destruction is not necessarily a bad or a good thing — as with book, magazine, and newspaper publishing, it’s just different. There are fewer widely shared artists — bands and singers who are widely known and listened to by just about everybody — and more niche artists who meet the demands of their silos of fans. Whereas one or two generations ago it was very difficult to break into the industry at a wide level unless you had a sound which appealed to the record studios (it was essentially impossible to get your music heard by a wide audience without getting into that special club), now “breaking in” is as easy as a quality microphone, a website, and a friend who’s a good audio editor. On the flip side, breaking in means a lot less than it did in the past.

This market shift is fine by me — who says musicians need to be billionaires? — but it also means you’re likely to see a lot more individuals and bands who set about to purposely appeal to internet memes to create products that can only be considered “music” in the broadest sense of the term.

The publishing industry is reaching the same point, whether it’s music, books, television, etc., where the breakdown of labels/publishers essentially turn into marketing outfits exclusively, and intensity of a fanbase is going to matter more than the size of that fanbase. If you want to write a book nowadays that is non-academic and you’re not a famous person, it’s much smarter to pair self-publishing with hiring a copy editor, a designer, and an expert marketing/promotions shop in my view. Large publishers of books and music inevitably ignore and fail to properly represent their small fish. As Rich Vigilante predicted on Coffee and Markets last year, within a few years the only books going through major publishers will be the few hundred or so each year with a celebrity or political author, or an understood shot at the NYT bestseller list. Everything else is going smaller, more immediate, but also less sticky.

The question is how soon the film industry follows suit. There are signs this is already happening, and I think it’s inevitable it will, but it’ll be interesting to see what form it takes. Technology is more of a barrier here, but that just means it’s going to respond in a slower fashion — not that the endpoint will be any different.

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