Majors Dominating Indies

My reply to a recent Opinion piece in the Tennessean newspaper, that was entitled “Radio struggles to maintain its listeners, revenues,” which contained an unnecessary and inaccurate attack of independent labels, distributors and artists.  According to the author “The major labels continue to grow and to dominate their independent counterparts.”  I sent it to the Tennessean a few days ago and have heard nothing and I am limited to 1000 characters at their website, so I’ll post it here.

I am writing in response to the opinion article written by Paul Allen entitled “Radio struggles to maintain its listeners, revenues” as I found the basis of one of his arguments not only incorrect but highly unnecessary.

Mr Allen paints the major record labels as having turned a corner and as a business model for radio to emulate as they are “continuing to grow and dominate their independent counterparts.”  In order to make that assumption, Mr Allen finds it necessary to widen the birth of what is considered a major label release and an independent release by using the flawed Soundscan method of counting all records that are distributed by a major record distributor under a contract of limited duration in their market share data.  It is only with this ‘voodoo’ accounting that can you arrive at such an incorrect assertion.

When you view the market as to which label ‘controls the master,’ how the labels identify themselves to SoundExchange, their membership in A2IM (American Association for Independent Music) and / or more importantly, which label did the A&R (discovering the artist, signing the artist, developing the artist, etc) that created the demand for the distribution to have something to sell, we see a completely different picture. We see the indies increasing their market share 5 of the last 6 years and 2009 will be another of those years. It is not 10% as Mr Allen indicates, it is actually closer to 30% (almost 40% in the digital market) according to both my quick calculation using Soundscan and the A2IM. In fact, country music’s biggest releases are the result of indie labels excellent A&R and artist development (Taylor Swift, Jason Aldean, Allison Krauss for example).

In addition, one cannot simply rely on Soundscan data for sales of sound recordings anymore.  So many artists are self-releasing their music and selling directly to their fans via their website or at their shows.  The vast majority of those sales happen off of Soundscan’s grid and while it is hard to quantify the exact number, you can safely assume the lion-share of those sales would count in the independent column.

Secondly, Mr Allen writes off the 13% drop in sales as nothing more than a side effect of a poor economy.  That might be OK, if this trend wasn’t an annual event this decade.  Businesses are never happy when they lose market share and cannot lean on a poor economy.  Look at Best Buy or Apple who are having increased sales for high dollar products in the very same economy that these labels are having a hard time selling a 99 cent download or a sixteen dollar CD.

Mr Allen should give credit where credit is due and not try to paint a picture of domination, but rather focus on one of partnerships, reinvigorating our consumers and releasing culturally relevant music.  For it was this monomaniacal pursuit of domination in the 1990’s that Steve Knopper in his best selling book “Appetite for Self Destruction: The Spectacular Crash of The Record Industry in the Digital Age” recounted that got major labels in the position they find themselves in this very moment.

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