Tuesday, July 31, 2007

UMG Prez: Indie labels enemies aren't big labels, they're webcasters

Larry Kenswil, President, Universal Music Group/eLabs on why indie labels are missing the future:
Any indie (and I mean a sound recording company, not an artist who chooses to give away music to make money other ways) who thinks webcasting should be used as promotion rather than a revenue source is missing what the future is about. All music use is substitutional for other uses. Everything you do in life substitutes for doing something else. Every bit of evidence we've seen shows that new media reduces sales in old media. Obviously, sales in new media haven't made up for it. On average, heavy satellite radio users spend less money on music (other than their subscription fees) than they did prior to subscribing. Likewise with internet radio. There's just less of a need to own. Promotion is fine, but if you need to get money in from the sound recording, I'll take payment any time. Indie labels are realizing that majors aren't their enemies. Their enemies are corporations who want to make money by performing music and not pay the performers for the privilege.
I understand the big labels' position: they've got all this legacy content they need to monetize. But most indie labels don't have a bunch of legacy content; all their content is newer and they want to get exposure for it.

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Blogger Fred said...

"Their enemies are corporations who want to make money by performing music and not pay the performers for the privilege."

Boy! If it wasn't for the majors, I guess nobody would be looking out for the best interests of the artists. Thank God for the RIAA, and their Gilligan-esque "little buddies" at A2IM.

This guy, like every other industry spokesman, including their SoundExchange dupes, slides right by the fact that half the money goes to the labels. Hell, half the people supporting the webcasters might just fall into a dead faint if someone on the other side would drop the empty pretense and admit that they were just trying to save their own jobs because they haven't figured out the environment has changed forever.

July 31, 2007 9:50 PM  
Blogger Chris B. said...

Well stated, Fred.

Plus, it's not like my only interest in the Joggers is the one or two songs Elise puts on Indie Pop Rocks every few days or weeks. I bought their record because I was exposed to them on IPR and wanted to hear more. No IPR - one less record sale this year.

It's a little surprising that the head of a major is this far off in his thinking. There's that whole defiant denial thing happening. Sounds a little like the tobacco lobby, actually.

August 3, 2007 11:58 AM  
Anonymous Darrell Burgan said...

As an owner of two independent music labels (as well as a net radio station), I would simply suggest that Larry ought to worry about his own business and keep his bloody fingers out of mine. ;-)

This sort of thinking is exactly what makes big labels big and independent labels independent. If I wanted to be a mindless corporate drone like Larry, I would have put on my suit years ago.

Unlike the big labels, us independent labels are in it for the art as well as the money, and we don't mind making a few bucks less if it means more people get involved with the art.

Fortunately, at the end of the day, Larry has no jurisdiction over the many people like me. Independent music will continue on, no matter what the RIAA thinks of it. And I firmly believe that someday we will be the RIAA's downfall.

Thanks for your concern Larry, but mind your own business.

August 5, 2007 10:44 AM  
Anonymous Dan said...

"There's just less of a need to own."

And he knows this how? That's assuming an awful lot. And how on earth is it different from terrestrial radio? When I heard I song I liked on FM (or heck sometimes AM), I'd rush to the store. Now I just pause the radio stream and click over to iTMS, Bleep or Beatport.

My need to own has only increased with the availability of material.

August 7, 2007 10:06 PM  

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