If The Old Music Business Is Dead, What's Next?

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If The Old Music Business Is Dead, What's Next?
By Gil Kaufman, with additional reporting by James Montgomery

Letting fans choose how much to pay for your album. ... Leaving the label you've called home for your entire career to hook up with a concert-promotions giant for a $100 million-plus deal. ... Recording iTunes-only one-off singles not slated for inclusion on an album. ... Offering "artist subscriptions" to fans, who pay a flat annual fee for more intimate access to their favorite acts. ... Serving up the millions of songs in your label's catalog to MP3 players and cell phones for one all-you-can-listen-to price per month. ...

These are just a few of the game-shifting changes the music industry toyed with in 2007, a year when the old model of signing with a major label and releasing an album every few years finally began to look like a relic of the distant past. As artists stretched their minds to imagine new and innovative ways to get their music into the hands of fans faster, cheaper and on the fly, what some have called the death of the music business is being viewed by others as the opportunity of a lifetime.

"The meteor's hit, the dinosaurs have all died and now it's time for whoever's next to take over," said Fall Out Boy bassist/lyricist Pete Wentz of the wide open future he sees for the industry. "And I think that it's a good time for new ideas to be out there." Wentz is at the vanguard of the new model of music-industry success where record sales are great (if you can get them), but delivering in concert, merchandising your "brand" and branching out into fashion, vanity labels and celebrity endorsements are almost as vital as writing "Umbrella"-like hooks.

This was the year of the so-called "360 deal," what some are calling the wave of the future in which companies like concert promoter Live Nation cut $100-million plus deals with longtime major-label superstars like Madonna in exchange for a piece of her merchandising, touring and recording monies. According to reports, one of the motivations for Live Nation to partner with Madonna is an expectation that, over the next decade, they might be able to rake in hundreds of millions of dollars in tour revenue from one of the most recognizable, and profitable, live performers on the planet. And while it was a shock that Madonna left her career label home, Warner Bros. Records, to sign with a company that has never released an album before, 360 deals were being cut across the board, even by fresh faces like Paramore, and some think they could be the thing that helps kick start a hit-starved industry.

"I don't think we really realized how big an opportunity it is, and how big of a change it is for the music industry," said Paramore singer Hayley Williams of her band's deal with Fueled by Ramen, in partnership with Atlantic Records. "But it's cool because I feel like we have a new kind of partnership with our label, and I do think that it's going to change the music industry completely. And it's forcing bands ... [and] people working in the industry, forcing them to be more creative about how they approach marketing or promotion or picking the single."

Williams said her band's deal makes it feel like the staff at their label are more invested in Paramore's future — and had the group not cut this kind of deal, the label may not have been as patient with their slow-blossoming success.

"A lot of bands on indie labels, they're working their way up, but it's slow," she said. "And so they don't get the chances we got. We spent two years playing to, like, anywhere from nine to 20 kids, and it grew gradually over those two years, and it got to where it is today because of that. But I don't feel like a lot of bands get that leniency, that patience, to just wait around for that big single to happen."