Remake, Remodel: The Evolution Of The Record Label

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Both of these areas depend on careful management and specialist skill to avoid costly
pitfalls.
As David Joseph says, ‘D2C is something you have to be real experts in. We are very
quietly doing it and I’m making sure we are being incredibly responsible in what we’re
doing, providing proper customer care and the best service. We are building a business
very nicely and have been for a couple of years. You have to look at it from the music fan
and the customer experience point of view – you need to have quality stock and delivery
around it. There has to be a totally great experience.’
A key part of D2C is enabling e-commerce on artist websites. Fans need to be able to go
to an artist’s site and buy everything there. Some products may be sold direct, some may
be through affiliate sales (via Amazon, for example), but ideally the transaction should
appear to the consumer as being through one site and in one basket.
Brian Message summarises D2C as monetising the artist/fan relationship. He feels that
record labels are held back by being traditionally reliant and skilled in a consumer
product model.
‘You are in a relationship game and that is so different to the consumer product game,’
he suggests. ‘It’s a massive difference.’
He believes that artists and management have a lot to offer in this space and that labels
should form partnerships with acts to really drive D2C. He cites the McFly initiative as a
great example of how to work relationships with fans. ‘Why did McFly only offer 10,000
pioneers on their online fan club?’ he asks. ‘Because for all the ones that didn’t get
pioneer status, you need them to be jealous. It’s a badge of honour. You’re playing the
relationship game.’
A resilient organism
Clearly the diversification of labels into a new kind of business – which Howard Jones
describes as moving from ‘high risk/high return, to high risk/high returns (plural), as
they increase the areas they are making money from is dependent on the development
or importation of appropriate skills and experience.
Alison Wenham of AIM cites a recent survey that suggests that only 20 per cent of the
organisation’s member labels have recorded music as their primary source of
income and more members than ever state that their primary source of business is
‘another music-related business’ 31 .
The sheer range of activities outside of recorded music that are pursued by labels, big
and small seems to underline that for most players, diversification is the key to survival.
Contents
31 An AIM survey showed that 22% of AIM members stated their label is their primary source of income in
the most recent survey. 29% state their primary source of income is another music related business that
they own - AIM Annual Membership Survey, 2010, Aug 2010
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