Remake, Remodel: The Evolution Of The Record Label

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Gary Warren, Commercial Director at HMV, cited the example of Tom Petty’s recent
album (Mojo) in the US where, included in the price of tickets was instant delivery of two
new tracks, day and date delivery of new album and live tracks available at the end of
the tour. Here it is clear that an artist like Petty finds it easier to sell tickets than to sell
new music, but through bundling he leverages his live appeal into his new release.
Likewise, the linking of physical sales and digital sales is something which is exercising
labels and retail alike. It is acknowledged that, although physical is the declining format
as digital grows, retail is able to promote sales in the physical world in ways that haven’t
yet been mastered in digital.
Both Tesco and HMV spoke of customer choice where the consumer can get great value
whichever way they come at a purchase – e.g. a packaged good is sold containing access
to digital files as well as a disc, and perhaps even access to a subscription service that is
built in. Likewise, the consumer could buy the album digitally, but be sent the extra
value physical items automatically. Salter believes that real fans will continue to want
something over and above the digital file.
Serving the fan
Perhaps Tesco and Radiohead have been comparing notes! The new Radiohead album
(King Of Limbs) was sold direct to consumers by the band and offered an option to buy a
high ticket physical format. Part of the proposition includes an instant delivery of a
digital version of the album.
Radiohead have been arguably the most successful artist to circumvent the label system
in recent years.
After 15 years with EMI’s Parlophone label, the band utilised the element of surprise in
Autumn 2007 when they announced a new album (In Rainbows) and invited fans who
signed up to their site the opportunity to acquire the album digitally – at whatever price
the fan chose to pay. The band also offered for pre-order a deluxe version of the album
for delivery a few weeks later.
This combination of honesty box self-pricing (arguably inspired by an example in the
book Freakonomics 14 by Stephen Dubner and Steven Levitt) and high ticket deluxe
version played with the notion of ‘value’ and simultaneously addressed the issues of
online file-sharing, real terms price decline in retail CDs, the relationship between artist
and fan and the desire for quality.
Brian Message was part of the team that masterminded this release. He said, ‘[Record
labels are] should be in the artist/fan relationship business but mostly still cling to the
copyright trading game with its reliance on the controlled distribution model. The digital
world has exploded this approach and how we monetise what artists do is completely
different and ever evolving.’
14 Freakonomics: A Rogue Economist Explores the Hidden Side of Everything – SD Levitt & SJ Dubner, publ. Penguin; 1st
edition (18 Jun 2007).
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