Record Labels: My Name Is Sue, How Do You Do?

I borrowed the headline from the Johnny Cash record “A Boy Named Sue” because it could be the theme song for today’s four major record labels and their lead litigator, the RIAA.

My friend Joe Benson reminded me yesterday that the music business is alive and well – if you look beyond the record labels.

60 Minutes reported Sunday that last year alone country star Kenny Chesney grossed $76 million from his recent concert tour.


Hannah Montana tickets are selling at a face value of $65 but resellers are easily getting $225.

And parents are shelling it out.

Some Police tickets were selling at $2,600 last summer.

The Police haven’t had a hit in 20 years!

The hills are alive with the sound of money. This in spite of all the problems the record labels are having adapting to the digital world of a new generation.

Big artists are doing a land office business. Prince gave away a few million CDs stuffed in a British tabloid recently to guarantee 21 sold out concert dates. We wrote about what Radiohead is doing by offering their new digital album online free – with the option of you making a donation for it. Concert sellouts are assured for them as well.

The Spice Girls are doing a reunion tour and tickets in LA are hard to get because fans have to register for a chance to buy them. That’s right, register. One of my students was thrilled to get an email yesterday saying she would be “allowed” to spend $85 for the worst seats at Staples Center.

The music industry is alive but there is a blow back on high ticket prices, unnecessary ticket handling charges and sky-high concessions at live events. Still, the fans flock.

What’s all this crying we’re hearing that the music industry is dead. It’s very much alive in just about every way but selling CDs.

The record industry is dead because it continues to want to sell something to fans that they don’t want – at least not in the numbers they used to want them.

The record business makes all the headlines and the headlines are always negative.

A group of record companies accused Jammie Thomas of illegally sharing music as diverse as Enya to Swedish death metal online. Yesterday, she became the first of 26,000 people sued by the record labels to take the case to trial. She is at risk for up to $1.2 million if she loses. The labels have some culpability as well. But you get the point.

Record labels are mired in the past and seeking to do the only thing they know how to do – sue.

While great opportunities abound, the labels are trying to get the radio industry to pay a performance tax to make up for the short fall in their business plans. If they succeed, they’ll win the battle and lose the war as they drag their strategic partner (radio) down with them.

The next generation is as into music as past generations – if not more so. They carry their music with them on personal iPods, spend lots of time searching for and sharing new artists and bands (legally and illegally). Their lives are defined by music.

How in the world could a record label fail in an industry that desires the end product so much?

If Ford, which just reported more record losses yesterday, had as many enthusiastic buyers for American cars as the labels have willing customers, Toyota would not longer be America’s number one auto manufacturer.

The demand is there and the labels continue to do the only thing they know which is manufacture things. First vinyl. Then CDs. Stuff you make in factories. And if that fails, sue people.

But the music industry that is bursting at the seams is onlinedigital, social, mobile. And live. No factories.

Five words the labels fail to address.

Instead they embrace manufacturing, licensing and suing people.

There’s no doubt where the major labels are headed and it’s not where the music industry is going which is up – to the sound of money.

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