How Digital Distribution Killed the LP
When Napster started being widely used in 1999, the music industry was faced with the reality that the internet was changing the world they knew. Services like Napster and Limewire allowed the unregulated sharing of music, one song at a time.
Around 1999 is when CD writers started to become proliferated in consumers homes as well, further compounding the problem. The traditional piracy of sharing single songs (or mixtapes) by cassette, minidisc, etc was labor intensive and did not rock the boat enough for the record labels to worry, but they were not prepared for the digital distribution revolution.
Almost 20 years since these events have passed, record labels are still suffering from it more and more every day. While today they have submitted to licensing deals with streaming services, revenues are still in decline. It is not surprising to find out that many artists these days are making their career a success without being tied to a record label.
Examples come from a wide range of genres, from classically trained musicians like Zoe Keating, to electronic acts like Pretty Lights, to the rapper who became the first artist to win a Grammy without a label, Chance the Rapper. These label-less artists tend to release their music for free, or in deluxe packages with many goodies for fans.
A good example of this would be Nipsey Hussle releasing 1,000 signed copies of his “Crenshaw” album for $100 each just before it was scheduled to be released online for free. These copies also came with a ticket to a future Nipsey Hussle show, but even still, the fans were happy knowing they were paying a premium. But while artists are still able to build enough hype to release a full length LP, the practice is becoming rarer.
In contrast the EP format has been on the rise as our musical attention span becomes shorter. As this has happened, audiences have tended towards focusing on EPs and Singles, but this does not jive with record labels traditional ways of monetizing an album. People don’t use CD players anymore, and our playlist driven culture doesn’t appreciate listening to an album all the way through, and when they do, they very likely are putting it on “shuffle”.
So how does an artist survive in these new waters? Have there been any examples before? To some, the answer is clearly yes. A great example would be to look at The Grateful Dead. They encouraged recording of their live shows by fans, and these tapes were distributed widely, gaining them much popularity.
They have also been heralded as masters of improvisation and mixing up their live show, keeping it interesting for the fans. This has led them to be the only example of a band that has sold out large arenas around the country, year round, every year, for over 40 years. The revenue this band has made without pushing the sales of music is staggering. For instance, during the 90’s they made over $285 million just from touring.
In today’s world of getting partial pennies for streaming plays and pirated copies of albums being shared for free, record labels may benefit from looking at examples such as The Grateful Dead and Chance the Rapper, so they can evolve instead of perish.
In a world where “views” and “listens” determine worth, record sales has become little more than a relic. The LP will always serve as a special artistic expression for an artist, but it is no longer the driving force in music.
Ben is an entrepreneur who specializes in early-stage start-ups, with experience in a variety of industries. He has worked in Biotech, M&A, Commercial Real Estate, Film &TV Production, and has founded multiple web start-ups. He is currently attending UCLA Anderson for his MBA.