Remember when Metallica drummer Lars Ulrich took a stand against file-sharing site Napster in 2000? Looking back, the reaction from the general populace was head-scratchingly self-righteous. How dare this multi-millionaire demand more money for his music! Just who does this greedy rock star think he is?!
Turns out, he was the smartest guy in the (court) room.
Maybe his timing seemed a bit nefarious since his band was flush with success from its multi-platinum best-seller, The Black Album. But with the introduction of file-sharing, and all the glorious "conveniences" it offers, Mr. Ulrich saw the beginnings of a terrible disruption headed his way: the devaluation of music.
And now that rumors are circulating that Apple iTunes plans to phase out downloads in the next few years (which the company says is not true), the music industry (major labels) should pay close attention to the consumer demand signals of what is working and nurture those revenue streams.
Let’s get physical
My sage advice to music labels? Don’t underestimate the resurgence of vinyl records - or any type of physical media for that matter. These are real products that music fans love collecting in-store and/or online and will pay top dollar for.
Thankfully, burgeoning music communities like Bandcamp, which grew by 35% last year, have figured out a way to make physical and digital co-exist in perfect harmony. In a recent blog post called “Bandcamp, Downloads, Streaming, and the Inescapably Bright Future” Bandcamp said fans pay artists $4.3 million dollars every month using the site, and they buy about 25,000 records a day, which works out to about one every 4 seconds.
Here’s more from the Bandcamp post:
Subscription-based music streaming, on the other hand, has yet to prove itself to be a viable model, even after hundreds of millions of investment dollars raised and spent. For our part, we are committed to offering an alternative that we know works. As long as there are fans who care about the welfare of their favorite artists and want to help them keep making music, we will continue to provide that direct connection. And as long as there are fans who want to own, not rent, their music, that is a service we will continue to champion.
What do you think? Is the Bandcamp model music to your ears? Sound off in the comments and whistle me a tune on Twitter @TClark01.
This story originally appeared on the SAP Business Trends community.
