Music Networks a Threat to Static Management

Record company executives must be finding it difficult to get up in the morning and go to work some days I reckon. This morning the news that Radiohead have earnt an estimated few millions pounds in the first day of offering their new album for download 'by donation' from their own website must have made a few record executive a little bit grumpy. The need for a record deal is becoming less and less as each month goes by. According to the Sydney Morning Herald with 1.2 million downloads from the Radiohead website on the first day:

A poll by The Times of 3000 fans who bought the album found the average price paid was £4 ($9.20) - about half the usual price of an album on iTunes. On those figures, on the first day alone, the band would have collected more than $10 million, and by cutting out the middle man - the record company - the band will receive every cent of it.

If contracted to a record company, the band would have had to sell 10 times that number of physical albums to collect the same profit.

Yesterday on local radio I heard an interview with David Sylvian (does anyone remember Gentlemen Take Polaroids?) who is now doing more interesting things with music. He has abandoned the idea of needing a recording studio and having the musicians in one place in order to make a recording. In the interview (streamed from the link) Sylvian says he is part of a global network of musicians who send files to each other over the net (sounds familiar to me). Each contributes to the recording process in their own time and place and then it is all mixed down at the end somewhere else by someone else.

The use of Internet by both Sylvian and Radiohead seems to me to make recording contracts, and the companies that offer them, irrelevant. Unless the companies can offer something more than manufacturing and distribution they are doomed. I think companies that work with musicians, if they want to continue making profit, need to move into touring, venue management, experience design using musical concepts and the manufacture of more trans medial artifacts (DVDs with books and interactive media components).