Rick Rubin wants half your tshirt/ticket receipts. Options

[mfk]

Music exec says business model is 'done'
Posted by Greg Sandoval

Rick Rubin, the man who coaxed some of the best studio performances out of the Beastie Boys, L.L. Cool J and the Red Hot Chili Peppers, threw the curtain open on the music industry this weekend. What was exposed was perhaps more uncertainty and frustration than many may have expected.

A celebrated record producer who was recently named co-chairman of Columbia Records, Rubin made startlingly candid statements in Sunday's edition of The New York Times Magazine about the effects of the iPod, digital downloads and piracy on the music industry.

"Columbia is stuck in the dark ages," Rubin told the Times. "I have great confidence that we will have the best record company in the industry, but the reality is, in today's world, we might have the best dinosaur. Until a new model is agreed upon and rolling, we can be the best at the existing paradigm, but until the paradigm shifts, it's going to be a declining business. This model is done."

I repeat: the man making these statements is co-chairman of Columbia Records. He's kicking dirt on the music industry's business model before the industry has come up with a replacement. His statement couldn't have been more shocking had he picked up a bugle during the interview and blew "Taps."

What this means is that Rubin doesn't think the record business can survive unless it reinvents itself into....into what exactly?

Rubin spoke about an industry-saving technology that will render the iPod obsolete by allowing people to hear their digital music from cars, TV sets, cell phones--almost anything--for a $20 monthly subscription fee.

Sounds like a music locker to me or some version of the so-called jukebox in the sky. This is an idea that several companies have been pushing for a while--including Michael Robertson and his MP3tunes, which lets people store songs on the company's servers and then access them from any Web-enabled device.

Somebody should tell Rubin that the public has largely ignored such offers.

Another jaw-dropping revelation in the piece is that Columbia is flirting with the idea of asking artists to cut the label in on as much as 50 percent of their touring, merchandise and Internet revenue. Performers have typically been allowed to pocket concert and T-shirt money. As for revenue generated from digital downloads, I did a story recently about how a growing number of artists and music publishers want a larger share of Internet profits, not less, and are girding for a fight.

I cringed at some of Rubin's quotes. I appreciated his honesty but I'm guessing the suits at Columbia will probably castigate him for going public with his doubts. While it's no secret that CD sales are falling and Internet revenue isn't making up the difference, his statements won't do much for morale at Columbia.

Rubin's interview also underscored the music industry's determination to reduce its dependence on Apple and iTunes. The good news for Apple CEO Steve Jobs, judging from Rubin's comments, is that the record labels appear clueless as to how to make that happen.

[jf5]

Well, he is right about the label model.

This part bothers me:

" Another jaw-dropping revelation in the piece is that Columbia is flirting with the idea of asking artists to cut the label in on as much as 50 percent of their touring, merchandise and Internet revenue"

Thats how bands make their money...not from big label record sales...


"Signed to a major" is getting less and less appealing

[mark lind]

Oh boo hoo. They should sign some good bands that people want to hear instead of the crap they've been pushing for the past 10 years.

[sniffawhiffoniff]

Oh boo hoo. They should sign some good bands that people want to hear instead of the crap they've been pushing for the past 10 years.

and Rock Rubin knows this. See the other thread with the full article.

Also, (this isn't necessarily directed at you Mark) it isn't Rick who wants 50% of merch & tour it's the suits who are flirting with the idea.

Again, read the full article. Whoever tried to summarize it here is an idiot.

[mark lind]

What's the other thread? I didn't see it.

I'm a Rick Rubin fan. I was boo hoo'ing the industry. He makes good records.... sometimes.

[sniffawhiffoniff]

What's the other thread? I didn't see it.

I'm a Rick Rubin fan. I was boo hoo'ing the industry. He makes good records.... sometimes.

I'm with ya. He's done plenty of records that I absolutely love.

Here's the link for the original article/thread http://www.thenoiseboard.com/index.php?showtopic=172588

[Arz]

Technically speaking, Rick Rubin didn't say anything about taking half the tour merch profits. That was some other fuckwit.

[mark lind]

I only got a fraction of the way through that article but I'll read the rest later. What I read gave me hope.

[night_passeges]

The new model of the music industry is the DIY middle class musician. If you have an entrepreneurial brain and can be creative with your merch you can make decent money by working hard and touring. Better money than you would with a Major Label deal. yeah, you have to work a lot harder. if you do it yourself you don't have anyone holding you back. Oh yeah, this model has been in place for 20 years at least. I think the music industry is a lot slower to catch up than has been publicized.

[sniffawhiffoniff]

The new model of the music industry is the DIY middle class musician. If you have an entrepreneurial brain and can be creative with your merch you can make decent money by working hard and touring. Better money than you would with a Major Label deal. yeah, you have to work a lot harder. if you do it yourself you don't have anyone holding you back. Oh yeah, this model has been in place for 20 years at least. I think the music industry is a lot slower to catch up than has been publicized.

certainly, and not just the independent artist but the middle tier (I hate to say class in this context) independent label has been running sucessfully and supporting these kinds of musicians for 20 years as well.

But it's not just the music industry that has to catch up.

[shagrath9]

Well, he is right about the label model.

This part bothers me:

" Another jaw-dropping revelation in the piece is that Columbia is flirting with the idea of asking artists to cut the label in on as much as 50 percent of their touring, merchandise and Internet revenue"

Thats how bands make their money...not from big label record sales...
"Signed to a major" is getting less and less appealing

Yeh , i don't think any band is gonna put up with that , Venues allready take 35% off the top of merch sales ...... theres gonna be a revolution for sure!!

Buy KMFDM albums & bands that stand against all this bullshit !

Oh boo hoo. They should sign some good bands that people want to hear instead of the crap they've been pushing for the past 10 years.

I agree , they need to find some career bands that can be worked over a few albums & become a longevity act .

[AckAckAckAck]

the only thing that might help cd sales at this point is if the internet broke.

[shagrath9]

the only thing that might help cd sales at this point is if the internet broke.

then Kids still won't buy cd's ...

[AckAckAckAck]

then Kids still won't buy cd's ...

they absolutely would. that's the thing with all this. when the medium for hearing music evolves, it essentially makes the previous one obsolete, and everyone involved in "the music business" has to adapt. if you don't want people to stop buying cds, then don't make something that's more convenient than cds.

[Arz]

if you don't want people to stop buying cds, then don't make something that's more convenient than cds.

I wish we still lived in a time where heretics like yourself could be burned at the stake for preaching madness. MADNESS I SAY!

[Vieira]

The whole idea of a label sharing touring and merch profits with their acts has been going on for at least 5 years. Robbie Williams was one of the first big artists to sign a deal like that. Korn's new deal is also similar. It's very very very common for indies at this point to have rights to at least some exclusive merch, and I've seen deals where indies have unlimited rights to produce anything with the bands' image on it for online and brick and mortor retail, where they give a miniscule royalty rate back to the artist. I've also seen deals where labels want to control all online and retail merch sales.

The basic idea behind it (whether you think it's moral or not is another story) is that labels are realizing that CD sales are a thing of the past. It's a dying format and it's not going to change, and since there's no real way at this point to control legal vs illegal downloads, the labels (from small indie to major) need to find a way to generate revenue. The fact is, as retail sales become less important, you're (as an artist) looking at a label more in terms of what they can do for you from a marketing standpoint, and less based on their distribution and power in the retail market place. So essentially, the labels are saying, "we're acting as a bank and fronting you money, and we're using our power to get you into magazines, onto soundtracks, onto TV shows, into video games, we're getting you (often with buy ons) onto higher profile tours than you'd get on your own which is bringing your touring and merch revenue up, with no benefit to us. So, let us get a piece of that, since no matter what we do, you're not going to sell as many CDs as you would have with the same marketing push 5-10 years ago."

I feel the quality of output from labels is pretty irrelevent. Small labels are suffering (mainly due to retail being in the state it's in). The majors are suffering. The mid-larger indies are really the only labels that aren't feeling a large decline in sales, right now. There are obvious sales exceptions (Linkin Park comes to mind), but overall, no one is selling what they or comparable acts were selling in the past. Look at Billboard on any given week. Chances are, the top 2 acts probably wouldn't have made the top 10 5 years ago.

[shagrath9]

they absolutely would. that's the thing with all this. when the medium for hearing music evolves, it essentially makes the previous one obsolete, and everyone involved in "the music business" has to adapt. if you don't want people to stop buying cds, then don't make something that's more convenient than cds.

I see what your saying , that does make sense , allthough a lot of the kid's that talk to could care less about music unlike say 20 years ago .... I think there's too much other stuff with Tv , video games , cell phones etc.
I remember in the early 80's if there was a new release hitting I'd walk 3 miles in a snowstorm to go buy it at my local music store ....... had to have it & had to have it that day .

[Vieira]

I see what your saying , that does make sense , allthough a lot of the kid's that talk to could care less about music unlike say 20 years ago .... I think there's too much other stuff with Tv , video games , cell phones etc.
I remember in the early 80's if there was a new release hitting I'd walk 3 miles in a snowstorm to go buy it at my local music store ....... had to have it & had to have it that day .

I think part of that is there isn't the uregency to go out and get the CD, since you can download it for free when it leaks.
Kids are payiing for ringtones, ringbacks, screen savers, etc, so they will pay for music in a format that it isn't available for free.

[AckAckAckAck]

I see what your saying , that does make sense , allthough a lot of the kid's that talk to could care less about music unlike say 20 years ago .... I think there's too much other stuff with Tv , video games , cell phones etc.
I remember in the early 80's if there was a new release hitting I'd walk 3 miles in a snowstorm to go buy it at my local music store ....... had to have it & had to have it that day .

yeah, but if you could have the music at your house for free, would you bother talking that walk? fuck no. most casual music listeners aren't the types that give a shit about liner notes and cover art and whatnot. the less shit they have in the house the better. that's who digital music is geared towards. why are you gonna go to fye or whatever expensive shop to pay 18 bucks for a cd you can score it on the internerd for like 10 bucks or for nothing at all?

[shagrath9]

yeah, but if you could have the music at your house for free, would you bother talking that walk? fuck no. most casual music listeners aren't the types that give a shit about liner notes and cover art and whatnot. the less shit they have in the house the better. that's who digital music is geared towards. why are you gonna go to fye or whatever expensive shop to pay 18 bucks for a cd you can score it on the internerd for like 10 bucks or for nothing at all?

Yeh , i'm in the Minority on that as well as i have to have The packaging & stuff , plus i hate the sound of Mp3's ..... I'll be curious to see what happens in the muisc industry .

The Guy that runs newbury comics wrote a letter on all this stuff saying they are doing just as good as they were thie time last year , but most muisc sales are people from 30 - 50 in age .
They were also throwing around ideas like having Coffee stands in the stores ..

[Vieira]

Newbury also makes more money on used DVDs and the novelty gift stuff than they do off of music.

[shagrath9]

Newbury also makes more money on used DVDs and the novelty gift stuff than they do off of music.

well they were saying a big $$$ maker for them is kids buying stuff like Yu_Gi-Ohh cards .......

[shagrath9]

Here's one of the letters he sent out in the past few weeks on it :::


""Newbury Comics Continues to Thrive!

I am very happy to report that we at Newbury Comics continue to thrive. Despite CD sales in the industry being around 18%, and DVD sales running flat, we continue to hit decent results. This is no doubt due to:

1) Our staff continuing to try to deliver a good environment for our customers to shop in, and:
2) The commercial pullout/failures of Virgin and Tower in our market.

I really expected us to be having a much tougher time of it by now, so it is a real relief to all of us to be doing about the same as last year at this time! Our staff continues to work very, very hard to deliver to you, and we certainly appreciate your continued loyalty.

How Should We Morph?

One thing I know, is that we won’t continue to be relevant, if we don’t continue to experiment with new store concepts and product ideas. We know that a number of our stores are a bit dated, and could use a make-over. We also know that our core customer base has shifted:
We now have somewhat fewer 16-24 year olds, as many in that age bracket have drifted to file-sharing services, itunes, or focused their energies and expenditures more on videogames or whatnot. But we also have retained many, many customers in their 40’s and 50’s (like me…) who are distinctly NOT behaving as their parents did at that age! This group is still very much engaged in music buying, DVD collecting, and concert attendance, all to an extent which continues to surprise us all. Some of us just don’t ever see ourselves as getting “old” !
We are also serving many more younger customers, some of whom have very strong interests in Yu-Gi-Oh cards, Magic the Gathering games, and World of Warcraft. And everybody is in love with licensed goods from the region’s very successful sports teams.

So Do We:

1) Build fewer, but bigger stores to offer an immense assortment?
2) Becomes a bit more family friendly in ambiance?
3) Offer food/coffee or other comfort areas?
4) Introduce bold new categories (such as…??) to make up for the slowly dwindling CD & DVD sales?

We are currently in the process of surveying many of you to get your feedback. Please take the time to fill out a survey in our stores, if asked, or respond to an online questionnaire, if we send you one via e-mail. It will really help me figure out how to best serve you in the future.

If you have any immediate thoughts please direct them to me at mike@newburycomics.com

THANKS!

…and finally… HATCHET the MOVIE!

If you’re looking for something fun to watch as a Newbury Comics customer, and you can appreciate an authentic, gory, campy, horror flick, then I urge you to check out HATCHET, which opens at select theaters a week from Friday! One of the lead characters wears one of our T-shirts during the entire film! The director, ADAM GREEN, is a very loyal Newbury Comics customer of old, and it really is a great film!

So thanks again for helping us stay alive in this crazy business! Please send me any comments or suggestions that you think would make Newbury Comics a better place to shop!

cheers, mike dreese

co-founder - newbury comics

p.s. any comments can be directed to mike@newburycomics.com
(please do not reply to the address this was sent from, as i won't get it)

[Vieira]

well they were saying a big $$$ maker for them is kids buying stuff like Yu_Gi-Ohh cards .......

Absolutely. All those collectable card game things sell like hotcakes. Kids will come in the day a new series is released to buy a ton.

[shagrath9]

Absolutely. All those collectable card game things sell like hotcakes. Kids will come in the day a new series is released to buy a ton.

That just amazes me for sure ...

The bummer for me about Newbury was for a while they were really catering to the walmart/bestbuy crowd & overstocking on the Backstreet boys type stuff , when i depended on them to have more of the independent releases no one else woudl have .... they seem to be getting back to that which is good .

I wonder if having Coffee would bring in more Buisness ?