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When are they Going to Figure it Out?

There has been a lot of press lately around Doug Morris’ move to Sony Music. Doug is a legendary music guy and his accomplishments are legendary. But, is he the guy who is going to lead the industry out of the darkness and into the light?

The truth is, it is OVER! There used to be guys who used to cruise around town in their little trucks selling blocks of ice so people could keep their food cool. They disappeared, because someone invented the refrigerator. The CD needs to disappear! The only thing that is keeping it alive is the major labels fighting for what is left of their market share. Somebody invented something better.

This may sound like a radical idea and one that no major label will employ. After all, it will take a lot of guts. CDS still represent a majority of the sold music in the country. But who is buying them? Young kids who will give them to their friends to “rip” into their computers. The other part of the market is the occasional music purchaser and older demo user who does not have an IPod. If you are an avid music fan you probably haven’t bought a CD in eons. If you are an independent artist, you can’t even get your CDS into retail outlets. Nearly every independent artist sells 90% of their music either digitally or at their concerts. This is what keeps bands on the road. This could be exchanged for selling people download cards instead of a full CD at the show.

But the sooner the CD is gone, the sooner everyone will have to convert to digital. That will be the time when the labels and artists can truly get control of their music again. When the CD is eliminated there will no production costs for labels to pay. At that time, we could actually find a price for music that people would actually pay. I don’t think at this time any full CD is worth more than $3.99. 99% of albums have a few good songs on them. The rest are there by the artist’s choice and legal obligations to publishers and labels. Any songwriter will love most songs they write. But the public has proven that they are not interested. We live in a track-driven world. Most people download music one track at a time. If there is a great, favorite classic album that you just discovered you don’t have, you may download the whole album. But when was the last time you listened to a new album all the way through multiple times. The answer is probably ZERO!

DRM (Digital Rights Management) is technology that prevented people from passing along songs that they downloaded from Itunes to their friends at no cost. Within the last couple of years, labels eliminated DRMs and it made it possible for tracks to pass freely among fans. This may be a good way to develop new fans, but from the label perspective, it seemed to me that the labels were giving up. They totally lost control of their music.

If full full albums of music were cheap enough, people might actually download a whole album for $3.99 rather than pay $1.29 for each track. This may be one way to begin to bring the audience back to appreciating full albums once again. Right now, unless you have a label paying for it, there is no sense in recording an entire CD. The recording costs are at least double those of an EP. That is money out of the act’s pocket, eventually. From an artist’s perspective, at least financially, there is no reason to record an entire album. Only one or two tracks on each CD is what generates enthusiasm for the band. From the label’s viewpoint it cost just as much to promote and market an EP as an LP (full CD). The problem is you can only sell EPs for about half the price. So, you literally have to sell twice as many to earn the same money. Most albums that are released lose money. It has always been that way. So, selling EPs doesn’t make sense for labels. Especially when so many people just steal the music.

There is no way you are going to put the “Pirate” sites out of business. There are just too many of them. The only way to combat them is to make music more affordable and provide extra things to the buyers that they can’t get from these sites. Access to advance ticket purchases, personal contact with the acts, discount on merch and the like. You have to make people understand that there is not much benefit to stealing the music. Sure, they will pay a little for it, but they will get a lot in return. You will not be able to dissuade everyone from visiting the “free” sites, but hopefully enough so that you can re-establish a sales base.

You can’t do these things as easily when you don’t have control of your music. Many years ago, Steven Van Zandt of ( E-Street Band, Sopranos) fame, told me that the CD was the worst thing that happened to the music business. At the time I thought he was crazy. At the time it had breathed new life into the music industry. People were re-stocking their libraries, as their vinyl got worn out. But Steven was 100% right. Everyone is essentially walking around with a Master. It’s a free-for-all.

Eventually the CD will become extinct, or at least rare. It is in the best long-term interest of the industry to euthanize it now. The problem is it will take time for the whole world to convert to digital music use. So it is not happening. The result is a slow, ugly, methodical death for major record labels and the people who work there. Every job at a major label is a temp job.

I quit my job at Columbia 10 years ago, because I saw this coming. I remember standing at my going away party wondering if I was overreacting. Was the future really as dismal as I thought it was? Was I making a huge mistake? It was actually worse than I imagined at the time.

There is a lot of great music being made right now. The major label part of the music business is shrinking everyday. To counteract this, the price of full digital albums is actually increasing in many cases. Is this the way to fight piracy? I don’t believe it is. In my opinion, give the customer what they want and more, at a good price. People are inherently honest. Right now there is no stigma attached to ripping-off music. My solution is the reduce prices drastically and have the RIAA and NARAS launch TV campaigns to discourage piracy.

This is a better option than waiting for the business to hit the bottom and work with what is left. A few years ago, a friend of mine wrote on his Facebook page, “will the last one out of the record business turn the light off”. The problem is the bulb will be burned out long before that.


About jimdelbalzo

As the former Senior Vice President of Promotion at Columbia Records and now founder/helmsman of the artist management company-Jim Del Balzo Entertainment, Jim has managed, consulted, and developed/executed the promotion and marketing plans for some of the planet’s most beloved musicians. He has guided the careers of artists/acts such as Bruce Springsteen, Pink Floyd, Billy Joel, Bob Dylan, Alice In Chains, James Taylor, George Michael, Soul Asylum, and System of a Down; to name just a few. Jim also does consulting for labels and publishing companies including Columbia Records, Warner Brothers/Reprise Records, Hear Music/Starbucks, EMI Music Publishing and several other entertainment entities. Jim Del Balzo Entertainment clients include,  John Mellencamp, Elvis Costello, James Taylor, LL Cool J, Burt Bacharach, City Sleeps, Buddahead and Since October.     Jim’s highly successful career and great service to the music industry has earned him a number of accolades and awards over the years. Namely, he was voted one of the Top 25 Most Important People in Rock Music (2000) and Promotion Executive of the Year (5 times) by Album Network—from which he also received a Lifetime Achievement Award. And Clear Channel twice honored Jim with the Executive of the Year Award while Friday Morning Quarterback and Radio & Records named him Top Industry Executive 7 times combined.   Today, Jim Del Balzo takes his talent to the microphone, adding voice work to his remarkable repertoire. His promotional expertise and attuned top executive instincts-combined with his richly unique sound- delivers VO that is truly somethin’ else.   Jim Del Blazo VO.  Like nothin’ you’ve heard. Like nobody’s business.   Jim lives in Saddle River, New Jersey with his wife Mary Beth, daughters Jessica and Julia, and their two golden retrievers.


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