Is Digi Music Killing Indie Labels?


Posted October 31, 2007 - By Frank Meyer

Hey, remember when everyone thought that the digital music revolution would even the playing field for the indie labels, who were getting crushed by the majors in the ongoing battle for music biz supremacy?

Well, it turns out that just like the rest of the entertainment business since the dawn of time, the big conglomerates are still crushing the little man, winning the fight, and making all the money…despite their incessant whining.

It's not that people aren’t willing to pay $15.99 for a new CD, or all the folks who want it for free that are screwing the indie. It's the places willing to sell music for next to nothing.

"This is actually capitalism on steroids," said Kris Gillespie, general manager of Domino Records. "There's no physical product. It's something that can switch hands very, very quickly and very, very easily. Any kid under the age of 21 who is a devout music fan knows it's out there waiting for them. Ten years ago, Best Buy started selling CDs as loss-leaders, where they were actually selling the CDs for less than they were paying for them. The fear is that being played out again in terms of the digital world."

Given the already low margins on digital music, selling albums for cheaper would barely touch Amazon's bottom line, but could destroy already-struggling indies.

"The pricing model is going to be driven down to probably — without artwork, with Amazon, with Best Buys coming in — somewhere between $6.99 and $7.99 when the dust settles," said Howard Greynolds, owner of the tiny Overcoat Records in Chicago. "What percentage of that we're getting remains to be seen."

"[But] ultimately, it still comes down to good music," Greynolds added. "Bands can complain that their record isn't selling, and the hardest thing for any band to admit is maybe people don't like their music."

True dat.

SeattleTimes.com: Indie rock struggling to make money in digital era

Is Digi Music Killing Indie Labels?


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