By: Connor

Could the 2010’s be the era that record stores are laid to rest? Paul Resnikoff thinks it might be.

What would happen if the majors stopped pressing CDs right now, closed down their plants, and wrote off their physical retail networks? The answer is that they’d lose billions, right off the bat! The lights would start flickering immediately!

But, they’d also quickly shrink unnecessary overhead, ditch ineffective legacy commitments, assume nimbler stances, and refocus all of their energies towards digital formats and concepts. And, start building companies designed to survive in the 2010s.
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But wait, labels are already shaving their overheads, cutting employees, slashing big salaries, and decimating promotional budgets. So, what’s the difference? The difference is that CDs still require resources, real estate, distribution networks, transportation capital, and relationship maintenance, despite a serious shift towards digital formats.

Meanwhile, parts of the digital riddle are being figured out – some money comes from paid downloads, users are engaging with authorized on-demand platforms, and label groups are getting smarter at marketing their artists online and through mobile channels.
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In 2015, labels will have either been forced into obsolescence, or totally reinvented around different formats and consumption habits.

Perhaps a more accurate title would be smash the CD store to bits? CD’s would still be available for fans who want them; the difference being they would be made to order instead of mass produced. Obviously this would lead to a higher price overall, but would pretty much eliminate physical overhead. Paul makes a grim prediction for the future of major labels – or depending how you see it, a promising one for indies.

Read more on The Music Industry Report

Technorati Tags: Indie Music, major label, music distribution, paul resnikoff, record labels

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This entry was posted on Wednesday, October 21st, 2009 at 2:10 pm and is filed under Music Business, Music Production, Wisdom. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.