It's pretty scary how close Zach got me to actually respecting Apple.  If you haven't read his article on how Apple arrived at their $0.99 price point for downloads, you best get to reading it first.  He's quickly becoming the music industry fact machine to my opinionated rant mobile.  Should be an entertaining mix of reading for all of you.

I don't necessarily hate Apple, and when I say I almost respected them above, that didn't mean I don't respect Apple's business sense.  I mean, I was a music business major, so the majority of that consisted of learning the best business tactics for success.  And Apple obviously dominates most in everything from business structure and how it is run internally, to its every move in the external world, creating an army of consumers that don't just enjoy their products, they Need them.

In my quest to find new content for the site, I occasionally run across articles that spark my fancy and get me really thinking.  Zach's write up was one, because I enjoy disagreeing with him, and a "Music Labels Are Still Apple's Slaves!" article at The Music Void was another.  While I don't like the scathing articles against the industry writing style per se, it still had plenty to scratch your head at.

Think about the main point The Music Void article brings up.

"The global digital music retail market is divided up as follows Apple/iTunes 70% (average global market share), Amazon 10%, and eMusic/Spotify about 5% with the remaining 15% left to over 500 different retailers…Monopolies serve no industries long-term interests other than the actual monopolist itself."

Well, that's pretty much common business sense right?  Why do you think smaller companies risk so much time and money lobbying and fighting companies like AT&T once they become a huge monopoly?  Because splitting AT&T up into seven smaller entities allowed the smaller companies to compete again and market competition breeds everything from lower prices to new, and much more creative products.  It's a win win for consumers.

I want so badly to say that it's beyond me how such a simple business idea is completely overlooked by the current big wigs running the music industry, but in all honesty, I'm not surprised at all.  It's absolutely true that a monopoly really serves no good to anyone but the monopolist, but the problem with the music industry is that the current model is dying.  Not sometime in the future.  Now.  And that freaks those at the top of major labels the heck out.  So, even though it's obvious business sense not to cave into Apple's demands that give them 70% of the digital download market and near complete control, the major labels still allowed it.

So, who's the bad guy then?  I think it'd be more than safe to say equal blame goes to both Apple and the major labels.  Apple has a monopoly on the digital download market and stifles competition, but as Zach pointed out, major labels get 60% of profits from the download profits.  It may sound like I'm an Apple hater, but I dislike major labels that much more.  I absolutely loved Zach's take on what role modern labels even have today when it comes to digital downloads.
They're basically just middlemen, and in this case, completely unneeded.

"The artist makes the music, records it, and tours the nation promoting it. iTunes pays for the server space to store the music and writes the software that allows for customers to find and buy it. The labels…well they…um…act as the middle man?…It appears 60% is the fee to hold back an army of lawyers these days."

That really is the case.  It's like going into McDonald's and as you get ready to order, some guy in a suit shakes your hand, tells you he's going to help you order, and when you tell him your order and give him $5 to pay for it, he keeps 60% of your money, gives the rest to the cashier, then eats the majority of your Quarter Pounder meal, leaving you two bites of the burger and a couple fries.  You look at the cashier and tell her, "What was the point of that?  I could have just ordered and given the money to you myself and avoided getting ripped off?"  To which she replies, "We know.  But that was our agreement, and we make most of our money on other things than the Quarter Pounder meal so we're not too worried about it."

So, the entire process is started by the musician when they create a song.  Zach proved there's no real good way to make money from streaming your music, making only $0.09 a song and needing to sell 12,000 downloads a month to make minimum wage, when going through a major download site like Itunes.  And things get even worse if you're signed to a major label contract, where you lose all control of how your music is marketed, distributed, and sold, seeing hardly any money from your song, while you travel the nation busting your butt for the label.

It's a funny world this current music industry.  The people running it act like nothing is wrong while it burns down around them.  The people at the head of innovation refuse to share and stifle progress.  And the producer of the industry's main product, the musicians themselves, are left driving around the country surviving on their few bites of burger and a couple of fries.  Take it from musicians like Jonathan Coulton, who made plenty of money on his own last year.  You don't need a major label to be your middleman, and honestly there's plenty of options besides Itunes to get your music out there digitally.

Unless you're just desperate to become some famous musician on MTV and sell out Madison Square Garden (which gives you odds worse than winning the lottery), then I recommend doing as much as you can solo.  We'll start compiling resources to help you and have interviews with musicians that have proven themselves successful without labels, so keep checking back.  In the mean time keep working hard on your music and if your songs are good, they'll gain a following and allow you to enjoy your entire combo meal, not just the few bites you were contractually allotted when you signed your life away.

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