Music industry watch

Wal Mart and big stars

Kevin Laws guest blogs RIAA Enemy #1: Wal-Mart, Not Kazaa:

As I wrote before, music distributors are actually using their contracts with big stars to develop new acts that they've signed to long term contracts. They do this primarily through their control over the channels of promotion and distribution - basically, carry my new artist and you'll get a discount on the Rolling Stones. We'll get the Rolling Stones to use them as an opening act to get some publicity, we've got contacts and deals with MTV because of our big name acts, etc.

. . .

More importantly, they carry very few new acts, and don't accept money to feature new acts in prominent locations. This is destroying one of the big advantages of the music companies when signing new acts - the ability to push the new acts to discerning tastemakers who frequent the music stores. They can still do top-down buzz (MTV, concert tours), but have lost their ability to affect bottoms-up buzz from people discovering great new artists. Additionally, it removes their incentives to pay for the top-down buzz since they aren't on the store shelves at the moment a new fan tries to buy it.

Excellent article -- very good insights. I had always thought that the age of the mega star was doomed. I am hoping that the Internet is going to create more artists, and help fans find these new bands. More music selection would then broaden the taste horizon and give all artists less attention for each listener. This in turn would level the playing field a bit and knock the mega-stars off their pedestals.

But, I'm not convinced that this is going to be the case -- I think the concept of powerlaws in blogs also applies to music and megastars -- having a megastar is probably a natural phenomenom. WalMart squeezing the record companies is pretty cool, but what does the post-WalMart landscape look like??

Posted by Mayhem at January 22, 2004 12:07 PM