The Exploding Online Music Ecosystem

by on September 20, 2006 · 15 comments

The Long Tail has an interesting example of the phenomenon I described a couple of weeks ago, in which bands are increasingly finding fans without the labels as intermediaries. Anderson tells the story of Birdmonster, a band fronted by a former Wired staffer. He describes their climb through the ranks of the indie music scene:

Birdmonster courted Internet radio stations, which have none of the constraints of traditional broadcast. As it happened, it was “Ted,” the owner of San Francisco’s BagelRadio.com, who convinced the booker to give Birdmonster its first big break, an opening gig for Clap Your Hands Say Yeah. That (and a batle-of-the-bands contest) led to an opening for the White Stripes, which was at that moment the pinnacle of indie rock. Birdmonster had arrived.

It was time to go beyond live gigs. The band recorded three tracks in a local independent studio and self-published them as a mini album, which they sent to a music service called CD Baby, which takes albums on consignment and sells them online. CD Baby, in turn, transferred the digital tracks to iTunes and other top music services, so they could be bought or streamed just like the biggest label hits.

The band then emailed song tracks and personal notes to various MP3 blogs, getting a positive mention on several, such as Music for Robots, which brought yet more attention. The band’s MySpace page started filling up with fans, and soon managers, labels, and industry folks came calling with deals.

But then something surprising happened: Birdmonster turned the offers down. As [the group’s front man Peter Arcuni] put it, “We’re not anti-label in principle, but the numbers (risk vs. reward) didn’t add up.”

Birdmonster isn’t famous yet. I can’t say I’m a big enough indie rock fan to judge these things properly, but they have about 8000 MySpace friends compared with 100,000 for OK Go and 40,000 for Arcade Fire, two better-known groups. It’s possible turning the labels down is something they’ll regret. Moreover, one anecdote is hardly proof of a trend. There are doubtless still plenty of bands taking the more traditional route to stardom.

But what I think this passage illustrates is the sheer number of new outlets for self-promotion that the Internet is giving to up-and-coming bands. MySpace, MP3 blogs, Internet radio stations, cheap CD self-publishing, and online music stores are all resources that didn’t exist (or were in their infancy) just five years ago. As these alternative promotional channels mature and attract more music fans, the labels’ promotional edge will ebb. Bands will be increasingly comfortable walking away from a contract that doesn’t suit their terms, confident that if their music is good enough, their online fan base will continue to grow, with or without the labels’ help. And the larger their fan base, the stronger their bargaining position vis-a-vis the labels will be.

I think it’s also worth noting the virtuous circle at work here. As more (and more talented) bands opt for the path Birdmonster is pioneering, more and more music will be available outside of traditional distribution channels. And as the quality and quantity of music available from alternative channels such as MySpace and MP3 blogs increases, that will in turn make those outlets more attractive to up-and-coming bands. I think this process bears a striking resemblance to the growth of the Internet itself. There, too, the growth in Internet users made it more important to have a website, which prompted more people to create websites, which, in turn, made it more valuable to be an Internet user.

It’s true that the most popular music today, like the best online content circa 1993, is offered by centralized, commercial firms. The alternative channels still have a relatively small audience and a lot of rough edges. But they’re also growing rapidly. And thanks to the power of network effects, they’ll grow more compelling as they get bigger.

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