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Prince and The New Music Business 2007-07-07

Posted by clype in Articles of Interest, Humanities, Money, Statistics.
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In his autobiography, Miles Davis wrote that Prince was the only musician in the world capable of moving music forward.

Davis was referring to musical prowess, but he may as well have been talking about Prince’s business acumen, as evidenced by his upcoming album give-away — the latest in a long series of innovative manoeuvres, including his escape from a ‘Warner Music Group‘ contract in 1994, early support for P2P trading, and status as one of the first major artists to sell music from his website.

Davis’s last, best, hope for the future of music most recently outraged the music establishment by saying he’ll give away CDs of his ‘Planet Earth‘ album to British fans who purchase next week’s ‘The Mail on Sunday‘ newspaper.

In light of the giveaway, ‘Sony/BMG‘ refused to distribute the album in Great Britain, provoking outbursts from music retailers who had been cut out of the action.

Paul Quirk, co-chairman of Britain’s ‘Entertainment Retailers’ Association‘, threatened:

“The Artist Formerly Known as Prince” should know that, with behaviour like this, he will soon be “The Artist Formerly Available in Record Stores”.’

Part of the problem, according to retailers, is that Prince’s move helped solidify a growing perception on the part of consumers that music is free.

Jack Horner, creative and joint managing director for ‘Frukt‘, a music-marketing agency, said that while

‘People like (Prince) play a key part in helping figure out what the models may be in the music business of tomorrow, by giving away a whole album on the front of a newspaper, there is a very clear devaluing of music, which is not a positive message to send out right now.’

Neither ‘The Mail on Sunday’ nor Prince’s ‘camp’ would divulge how much the newspaper paid Prince for the right to give his album away, but it’s clear Prince was paid upfront, and that nearly 3 million readers of ‘The Mail on Sunday’ — plus everyone who bought tickets to one of his shows — will receive the CD for free.

The give-away almost certainly contributed to Prince selling out 15 of his 21 shows at London’s ‘O2 Arenawithin the first hour of ticket sales. The venue (formerly the Millennium Dome) holds around 20 000 people. When the remaining six shows sell out, the series will gross over 26 million USD.

Combined with the undisclosed fee paid by ‘The Mail on Sunday’, it’s not a bad take for someone who’s involved in a ‘very clear devaluing of music’.

Prince’s latest gambit also succeeded by acknowledging that copies, not songs, are just about worthless in the digital age.

The longer an album is on sale, the more likely it is that people can find somewhere to make a copy from a friend’s CD or a stranger’s shared-files folder. When copies approach worthlessness, only the original has value, and that’s what Prince sold to ‘The Mail on Sunday’: the right to be ‘Patient Zero’ in the copying game.

As with blogging and so many other things digital, music distribution could become a competition to see who posts things first. In a sense, music distribution would no longer be about space — it would be about time.

More bands and labels are likely to explore the idea of squeezing extra value out of their music by selling off the right to be first, as traditional sources of revenue continue to dry up.

‘Universal’s’ recent insistence on an ‘at will’ contract with ‘Apple Music Store‘, for instance, is thought to be part of a plan for the world’s largest record label to start selling the exclusive rights to debut certain albums. And nowhere is it ‘written in stone’ that music stores are the only candidates for buying those rights.

Artists have licensed music to advertisers for decades, of course, but this goes a step further: allowing the licensee to function as the music’s distributor (at least initially).

If this idea catches on, artists and labels looking to duplicate Prince’s success will have to proceed with caution if they want to avoid accusations of ‘selling out’.

In the ’90s, a popular slogan for posters and graffiti in and around my college radio station was ‘Corporate Rock Sucks,’ and although that attitude no longer seems prevalent, fans still routinely revolt when they hear one of their favorite songs used in a car ad.

Prince ensured that ‘The Mail on Sunday’ version of his album looks identical to the one sold in stores, giving it the clear appearance of coming with the paper, rather than being of the paper. Companies that want to make a business out of music sponsorships, like ‘RCRD LBL‘ (an upcoming collaboration between ‘Engadget’s’ Pete Rojas and ‘Downtown Records‘), will have to negotiate sponsorships with similar care.

If they do, brands, fans and bands large and small stand to benefit.

Planet Earth : Prince

Regarding the new Prince album, ‘Planet Earth’, being given away with ‘The Mail on Sunday’ tomorrow. I’ve no idea whether it makes sense for the newspaper but it might indeed make sense for Prince himself:

A Sunday newspaper is understood to have paid the Princely sum of 1million USD (500000 GBP) to give away the pint-sized popstar’s new album, in an unprecedented move that has infuriated music retailers.

‘HMV’ Chief Executive Simon Fox has said it would be ‘absolutely nuts’ for the music industry to give away new CDs through papers amid fears that other artists will follow suit.

‘The Mail on Sunday’ is hoping that its costs will be justified by increased sales when it releases the ‘Planet Earth’ album before any other distributor in the world.

Newspapers have used CD and DVD cover mounts for several years but never before has an artist released a new album as a give-away.

The music industry, which is battling fierce competition from on-line ‘so-called piracy’, fears the move will further devalue its product.

Martin Talbot, editor of ‘Music Week’, said: “

‘The danger is that it becomes a trend for artists who can get a large sum upfront with no marketing costs.’

If Prince is on the usual sort of deal with his record company he’ll be on 4 per cent of the gross price (which I’ll assume is 15.00 GBP) as the songwriter. He shares that with his publishing company (which I assume that he also owns, that’s how it goes these days) but we’ll count that as all his.

He also gets 14 per cent of the gross — as the performer: out of which he pays recording and marketing costs. Those latter are very high indeed. A badly performing album can leave a musician in debt.

So, if the album went on sale he’d get some 2.70 GBP per copy.  Out of which he has to pay those marketing costs. However, his deal with ‘The Mail on Sunday’ gives him (approx.) the revenue from 200 000 sales — without any of those costs.

So how many copies of an album would Prince expect to sell in the UK anyway? If it’s anything less that 500 000 or so then I would say he’s quids in with this deal.

He’s reduced his risk and quite possibly increased his income at the same time.

(Please note, all numbers are very vague and only illustrative).

There’s also one other money-maker here. Will making the album free mean more radio time for it? I have absolutely no idea, it could go either way I guess. But the UK is a wonderful place to have your song (as the writer, not the musician) played on the radio. A local radio station will pay 35.00 GBP or so — a national one 45.00 GBP to the songwriter for each and every play of it. Have a hit (in terms of radio play) and you’ve got what, 20 or so stations, playing the song four times a day? More maybe? But even at that, it’s 3 000 GBP/day for the four or five weeks you’re on the play-list. Call it a round 100 000 GBP for being the songwriter of something that gets heavy radio play then.

So, does giving away the album make this more or less likely?

Prince is giving away the first single from an upcoming album to mobile phone users —  as the rock star, who is also launching a perfume — looks to create a buzz around his ‘Planet Earth’ album, due out in weeks.Similar to David Bowie’s involvement with a ‘Nokia’ phone launch last year and Paul Mccartney’s plan to publish an album through ‘Starbucks‘, Prince’s latest stunt is part of a trend for long-established musicians to try to interest new fans in their latest music by aligning themselves with the next new thing.

‘Artists have to stay in the public mind and they have to stay hip,’ said ‘Jupiter Research‘ analyst David Card who noted that a lot of time had elapsed since Prince’s best known hits such as ‘Purple Rain’ or ‘1999’.

Prince’s new single ‘Guitar’ became downloadable on Thursday to Verizon Wireless phones — to customers who use the service provider’s new V Cast song ID feature, which identifies songs for listeners who hold their phone next to a speaker.

‘For an artist to be associated with a slick new service is a good idea,’ said Card, adding that the artist’s appearance at the half-time show at ‘The Super Bowl’ American Football game in February was a publicity stunt in a similar vein.

‘He probably wouldn’t have done ‘The Super Bowl’ in his heyday. He’s a mainstream artist that needs to keep his name out there,” said Card.

Fans who download the free ID feature can then go to Web sites such as revver.com, myspace.com or veoh.com to play the video from the Prince single holding the phone close by.

  • The phone will then provide information about the song and an option to download it wirelessly on the spot.

Verizon Wireless‘ has had deals with groups such as ‘The Fugees’ in the past for exclusive sale of the song for weeks before general release, but Prince is the biggest name artist who has announced such a deal with it so far. It did not reveal the terms of its agreement with Prince.

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Comments»

1. cash4kids - 2007-08-08

Free with a paper, free at the concert, download free, a new perfume and half time at the superbowl, the man’s all business.. As for the music? Well, for “Guitar,” Prince has nicked a guitar riff from U2 (“I Will Follow”) and a bass line from Duran Duran (the same song that provides his album title).


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