What’s Wrong With Music Biz?

The basic recording contract upon which most of the popular music business has been based for the past 50 years is fundamentally broken.
This is not the sentiment of one of the countless critics who throw stones at the music industry from afar, usually for vague philosophical reasons, but rather the pragmatic opinion of a true insider: Tom Silverman, founder of Tommy Boy Records, which sold millions of records by hip-hop artists including Club Nouveau, Coolio, De La Soul, Digital Underground, Everlast, House of Pain and Naughty By Nature.

Silverman also feels that the value of social networking sites like Facebook has been overated and that actually these sites have done little more than generate "noise" by obscuring the true working artists by having them blended in to what amounts to the amateur music scene.

All those together don’t make up for the drop. For example, in 2008 there were 17,000 releases that sold one copy. Last year, there were 18,000, and something like 79,000 releases that sold under 100 copies. Under 100 copies is not a real release — it’s noise, an aberration. In any kind of scientific study, it would be filtered out. It’s like a rounding error. That 79,000 number represents almost 80 percent of all the records released that year.

80 percent of all records released are just noise — hobbyists. Some companies like TuneCore are betting on the long tail because they get the same $10 whether you sell one copy or 10,000. Who uses Photobucket and Flickr? Not professional photographers — those are hobbyists, and those are the people who are using TuneCore and iTunes to clutter the music environment with crap, so that the artists who really are pretty good have more trouble breaking through than they ever did before.

Read More at Wired Magazine.