In the 20th century, recording and distributing music was an economically viable industry. It satisfied the needs of the consumer (to have access to recordings of artists and repertoire) and it compensated the performers, composers, labels and distributors for their efforts.
For classical artists and ensembles, recordings served many purposes. For the most popular performers recordings could provide significant income. For others the income was secondary to the promotional value of being recorded. The best artists and ensembles were recorded. The more frequently you were recorded, the more prestigious the label and the more well regarded the accompanists the more money, status and promotional value the recording created. Recordings served as a proxy for the status of the artist or performer. Whether the recording created the status or the status created the recording was unclear but the two came as a pair.
The Internet and attendant digital technology has fundamentally disrupted the recording industry. Today anyone can make an infinite numbers of copies of a recording and can share those copies with anyone else at no cost and with little or no effort.
Technology has no ethics. It may be wrong to copy a recording and share it but you cannot base an industry on a presumption of moral behavior. Even if a significant number of industry participants follow the rules, a large percentage will not. The practical, social and economic difficulties of making the industry work are insurmountable when a large share of the revenue vanishes and the moral minority who play by the rules are constantly confronted by the reminder that others do not. Attempts to legislate or to litigate proper behavior have completely failed. There is no practical and/or scalable way to enforce the desired behavior. The 20th century recording industry is dead.
The remaining 3 “major” labels – Universal, Sony and EMI - will be out of the classical business within 2 years. They will create no more than a handful of additional classical CDs. With the possible exception of a few “crossover” artists the labels will drop all of their classical artists. The majors will focus on trying to salvage their pop business and will abandon classical because it is more trouble than it is worth. The 20th century recording industry and business model is obsolete. It will soon be gone.
The remaining viable classical label will be Naxos. Their costs are dramatically lower and their business model allows them to operate profitably in a smaller industry and with much lower sales numbers. A primary contributor to Naxos’ lower costs is the fact that they don’t pay any residuals to the performers. There is no income potential for performers in the Naxos model! They will profitably produce CDs for several years longer than the majors.
There will be a small number of “vanity” labels left but their volume will be microscopic and they will operate on the same financial model as Naxos. They will ultimately disappear as well.
Virtually the entire recorded history of classical music will vanish from the world. None of the pre-2000 material had digital rights cleared when it was recorded and the cost of clearing these rights now dwarfs any income that could result. There is no commercially viable model for reviving this material.
Music will still be recorded but it will have to be recorded very inexpensively. Cost considerations will dictate that music will be recorded live and music will be distributed “raw” – without the extensive engineering designed to make it “perfect”. This music will capture the excitement of live performance and the audience will expect character, excitement and imperfection rather than the homogenized perfection of the studio recordings of the past (This is a big issue for many performers - Get over it!). Live recordings will completely replace studio recordings, new recordings will completely replace old recordings, the shelf life of (most) recordings will be brief, fresh recordings will have maximum value to the audience.
Payments to everyone involved in the recording of live music will be reduced or eliminated reflecting the repurposing of recorded music. When recording was a revenue generating industry it made sense to share that revenue with all participants. Now it is a brand building and audience development industry. The value of brand building and audience development is shared by all participants. Recording and distributing live performances preserves, sustains and enhances the brand equity and commercial viability of everyone involved. Each paarticipant benefits from the value created.
Everyone will have an internet connected home theater. Webcasting live music into the home will still retain significant economic value. The audience will pay either through subscription or pay-per-view models. Live performances will be perceived as an “event” rather than a recording. Reaching a broader audience through webcasting will be a critical strategic component of any 21st century performing arts organization.
So – where does this leave the classical world?
The 3 Laws of Classical Music in the 21st Century
- Money will be made by performing, by donations, by sponsorships and, in some cases, by endorsements.
- Recorded music will have no commercial value other than promotion. It is not a tool for revenue generation – it is a tool for brand building and audience development.
- Every download and every stream of recorded music increases the promotional value of that music and increases the brand equity of the performer and presenter. It does not cannibalize recording revenue because there is no recording revenue! It does not cannibalize ticket sales – it enhances ticket sales by enhancing brand equity and building audience demand!
A Plan of Action
As the performers and presenters watch the recording industry melt away under them – what should they do!
- Recognize that the CD is dead. Recognize that there is no direct revenue to be made by recording. Act now!
- Be an artist/entrepreneur! The 21st century artist, performer or presenter cannot focus on the art and let someone else worry about the economics. Promote yourself tirelessly and broadly.
- Get your music recorded, put on the net and make it as widely available as possible! Stream it! Download it! Put it everywhere you can. The promotional value of recorded music will no longer rest on the prestige and promotional engine of the label. Instead the promotional value of music will lie in how broadly it is disseminated, where and by whom. Every time your music touches the public it will enhance your brand awareness and your economic value as a performer.
There is a lot of denial in the classical music world. Performers still believe that a CD represents a badge of honor. They can't let go of the obsolete recording business model. They cling to the fantasy that there is intrinsic value in recording and that they should be additionally compensated for the recording of a live event.
This is toxic thinking!
It prevents us from confronting reality, from making a plan to deal with reality, from moving on and succeeding in the 21st century. It prevents the industry from adopting a business model that will assure its survival. It wounds us all. Living in the past can assure that classical music shares the fate of the US auto industry.
Don’t fight the future. Embrace it. Adapt to it. Make the future your friend!