SXSW 2008 Packed, Pumped and Promoted
When Sia promoted her latest album, "Some People Have Real Problems," at the South by Southwest 2008 Music, Film and Interactive Festival in Austin, she really summed up the world to the music industry insiders in attendance. Some people around the world have real problems. Banks, investment banks, hedge funds and the like are writing off hundreds of billions of dollars with the dramatic repricing of credit and liquidity in the last 6 months. Homeowners and real estate investors have lost trillions in market value since the peak in 2005. The dollar has lost nearly half of its value since 2000.
The music industry, by contrast, is going through a business model transformation that exists in every industry, from automakers to wholesalers. The impact of technological innovation is an economic principal referred to as creative destruction, perhaps especially frightening to an industry built on the creative. But like any reality, it must be embraced and proactively engaged to get the best end result.
To circle back to SXSW, the music festival is bigger than ever, with more than 1,700 bands in attendance and 12,500 people registered for the convention. Music - live, recorded, sound-tracked, ring-toned, philanthropic, advertised or merchandised - is as important as ever. But the decline in CD sales so far has exceeded the increase in digital downloading revenue, and artists are questioning the value added from the major labels.
"We can record something at night, put it on the site for breakfast and have the money in the PayPal account by 5. With all due respect for my very great friends who have come up in the record-company environment, it’s nice to see that technology has opened the doors to everybody.”
Lou Reed gave a terser evaluation of the value of a record label contract.
“You have the Internet — what do you need it for?”
The real reason may be found right in Austin. Fragmentation is inefficient. Over time, all companies and industries are paid for their value added. The development, distribution and promotion of music is changing radically. Established artists and record labels have seemed to mutually find that each may be better served apart, but New York Times reporter Jon Pareles hit the point on the head in saying, "South by Southwest probably has fewer completely unknown so-called baby bands, but hundreds of more toddlers" that need attending. [Source]
Sia "Day Too Soon"
