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May 5, 2008

Another Jolt to the Music Labels

Verizon is doing something quite interesting in the mobile music market.  It's sending a portable studio around the country to give musicians the opportunity to record tracks which it will distribute through it's V-Cast Music service.  The company says it doesn't want to replace the labels, so the effort is targeted to what songs the company can record with its one studio.  Still, it raises an interesting concept, where the stores become labels in one form or another.  The model now is to license the song catalog from each label group.  Why not go directly to the artists, especially those without contracts limiting their output to their label.  Online stores can use this kind of exclusive content to distinguish themselves from each other. 

If brick and mortar stores such as Starbucks can sign acts such as Paul McCartney to exclusive deals, why not Verizon, Apple, and any of the other online stores.  The labels wouldn't be too happy having their distributors compete with them for talent.  Verizon wouldn't have to contend with the overhead of fabrication plants, designers, promoters, and other label components.  This development could conceivably change the economics of how bands market themselves.  It's sort of like the Radiohead experiment with a standardized front end for the participating musical acts.  This model works even better as demand for physical media drops off.  And musicians could benefit by having a direct accounting for how many tracks were distributed and for what price.

Technology has created new distribution channels for music, but it also freed musicians from the labels by making digital recording relatively inexpensive.  Adobe, Sony, and others offer sophisticated yet affordable multi-channel recording software packages.  Participating bands can bring their own archives directly to stores.  It's not as if there is a shelf space problem online.  This idea opens up all kinds of possibilities.

More details about Verizon's efforts are in CNET.

May 5, 2008 | Permalink


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