Remake, Remodel: The Evolution Of The Record Label

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Take for example this quote (from chapter 6) and guess its source: ‘There are decades of
legacy built into everyone’s mindset and thinking. Most people are so resistant to
change. People are fearful that if they do something new, it will go wrong and spell the
end of the end of the business they have worked in for all these years. The reality is they
have to take risks and back new ideas. That way there’ll be a future, but just clinging on
by the fingernails to the past is just destined to fail.’
It may surprise some to find that it comes from a senior global business executive at
Universal Music – Boyd Muir.
This complements perfectly the view of a progressive artist manager Brian Message
when he says, ‘Labels are changing but not fast enough compared with if they were
starting with a blank sheet of paper.’
So, it is clear that if labels had nothing to lose, change could be more rapid. But life just
isn’t that simple.
Not only is the UK record business worth over £1bn a year (retail prices) 37 – it also
provides the fuel which powers the rest of the wider music industry. This comes in the
shape of investment in artists and recordings of around £200m a year and marketing
budgets of around £170m 38 .
Both these pots of money have been under threat since the market downturn at the start
of the new millennium but it is interesting to note that investment in talent (A&R) has
suffered significantly less than the sums poured into marketing which have fallen by
almost £100m since 2002 39 and probably also reflect the increased efficiencies brought
by marketing in the digital world.
So to maintain a high level of investment, I believe it is in the interests of the wider
industry for this transformation to be evolutionary rather than revolutionary.
Having said that, are labels maintaining a healthy balance between protecting the legacy
business and developing the new one?
Many think this could have been done better – especially in the early years of the
market’s development.
Consolidation of the major labels is a reality that some feel has held back the growth of
the digital market. Martin Mills points out, for example, that a new digital service simply
could not launch today without Universal as it is just so big.
This power, some say, puts a lot of responsibility in the hands of the bigger players and
is a cause for concern.
37 BPI Statistical Handbook 2010
38 BPI Surveys - A&R investment was £201.5m and marketing & promotion was £169.2m
39 BPI Surveys - A&R investment was more or less the same in 2002 as it was in 2009. Marketing &
promotion fell by about £100m in the same period.
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