As Concert Window experiences Techstars as part of the NYC 2014 class, I’m noticing that the investment environment is starting to feel different than it did four years ago, when I founded the company with Forrest O’Connor.
Back then, and still now to a certain extent, music companies were viewed as a black hole of investment. But that’s changing.
Why is that? Let’s step back to look at the larger market forces at play. Twenty years ago, if you wanted to consume a band’s music, you had to buy a physical item like a CD/LP or attend a live show. With few other options, consumers paid up.
Then the Internet came along.
As Napster, YouTube, Spotify and other instantly accessible formats flourished, it became quite easy to access recorded music. Forcing people to pay for that access became a losing battle. If you really wanted to hear a track or an album, there was somewhere online that you could find it for free.
As a result, revenue from recorded music is trending downward and may never come back up. (See this excellent article by former Apple Music exec David Pakman.)
Overall, the music industry has contracted from $32.2 billion overall revenue in 2010 to $27.6 billion in 2013 (source).
Is the music industry doomed? I would say yes, in its current form. But is music doomed? That’s a very different question. And the answer is an emphatic “no.”
It starts with a simple belief statement: People love music. It stirs something that no other medium can. That hasn’t changed.
But the channels through which money flows are changing. Money is flowing less and less through record labels, performing rights organizations, and other middlemen.
And it is now flowing directly from fans to artists.
All of us are seeing the same phenomenon. Fans don’t like being forced to pay for access to an artificially limited resource like recorded music. They would rather choose of their own volition to support the musicians.
Six months ago at Concert Window, we changed our per-show ticket price from $5 to “Pay what you want.” What happened? We instantly doubled ticket sales, which is not all that surprising. But in addition, when people were given complete agency over what to pay, and knowledge that most of the money was going to the musicians, they chose to contribute almost twice as much as the old ticket price.
This is how music will begin to grow again. And this is how power and control will begin to flow back to musicians.
That’s the way it should be, and it’s happening. Hallelujah.