A Proposal To Save The Music Industry
by Alex Cosper (5/10/09)

The music business needs to update its archaic business model of only breaking even after a million or half million (whatever it is) unit sales. The cost of manufacturing, distribution, promotion and all that other stuff is so much last century's worries, yet the labels still hang on to the old inefficient model that cuts against profits when they could be cutting costs and maximizing new media. They sign a bunch of acts in which most fail to sell while the few that do pay for all the losses. Keep in mind, the object of every business is to make a profit.

In the 2000s almost everyone wants to be some sort of media star either with a website, video game, reality tv show or something along those lines. Lots of local artists are flocking to YouTube and all the popular online social networks. A whole new generation is experimenting with media and identity in a way no one ever dreamed before even though deep down inside a lot of common people have always wanted a piece of the spotlight. So why fight the people who want to promote themselves with popular media?

Instead of music business leaders scaring away an alarming percentage of their patrons over the past decade, why not do what the music industry always did best in its heyday: give the people what they want. Let people experiment with media through licensing. When I talk about media I'm including music and videos and all that copyrighted stuff that makes people feel off-limits and uninvited to explore the possibilities of free expression by creating new media with existing media.

Let web designers and webcasters use music for their programming, not at a per minute rate, but a simple license that produces exponentially more profit for labels, artists and songwriters than the current licensing model. Make these content publishers pay $100 per song and let them play the song as many times as they like. Let independent movie makers use a song as their theme song for $100 instead of whatever outrageous barrier deal is in place right now. Let the DJ/producers create unlimited mixes of music anyway they choose through affordable licensing.

Let fans sell popular songs on their websites if they pay a $100 license. If it's for a major motion picture, that's a different story, of course. And I should make clear it should still be a buck a song for fans who use music privately.

I know some people from the music delivery camp might argue $100 is too high while music executives will say it's too low. The reason I picked $100 because that's the price I think is fair for everyone. That's the price I would pay if the recording owner granted me permission to use their song anyway I chose for my own marketing purposes. I think once the ball got rolling $100 would seem like a good deal to everyone, especially the labels and artists.

Think of all the people who want to create their own theme albums with other people's music. They might buy ten licenses which would be $1000. Think of people who want to just use popular songs on their websites. There are over a billion websites on the planet, so why not?

The way things are now, the labels have destroyed themselves financially by going to war with their customers, which is something I would have never tried. It just sounds like a recipe for failure. Instead, why not just switch to a recipe for success by making friends with customers? Part of the reason Apple was one of the few companies to turn music into profit in the 2000s is that their customer service is so friendly. I think if the music business starts doing nice things for music fans, the fans will come back.

Taking a quick look at the numbers, the current music business model requires the sale of a massive amount of units to break even. But instead of trying to sell a million units, why not concentrate on selling 100 licenses at $100 a pop? That's $10,000. Now, imagine if a top artist that actually sells a million units sells 10,000 or 100,000 licenses.

The money would stack high and the music industry would thrive. If the major labels don't do it, maybe an independent movement will. As a songwriter I would welcome the opportunity. And there are millions of other unknown artists and producers who probably agree.