The Trend of the Citizen Music Mogul

Musicians are now using in-home studios and local production services to by-pass the big recording companies.

Gerry Kaufhold, an analyst with the In-Stat market research firm, reports about this fascinating development in the latest In-Stat newsletter, noting:

Dave Kusak, Vice President, Berklee College of Music, and Gerd Leonhard, “music futurist,” have published a book titled “The Future of Music: Manifesto for the Digital Music Revolution.” Kusak provided some mind-blowing statistics. Of 30 thousand Compact Disc “titles” that were released in 2004, only 400 “titles” sold more than 100 thousand units, and 25 thousand “titles” sold fewer than 1,000 CDs. The big recording companies lose money 98.7% of the time! Because of this frightful “business model,” the few remaining mega-music companies are driven totally by the need to create monster hits, and a lot of otherwise good music never gets a chance in the marketplace.

Because of this development, independent musicians, singers and songwriters are taking control of the production and marketing processes themselves. They are finding that if they control costs, they can actually make more money doing it themselves than by being discovered by a big music company.

The Artist Formerly Known as Prince (or maybe he is once again known as Prince — I’m not sure) found that to be true. His best-selling album “Purple Rain” sold more than 13 million copies, yet he made more money on his most recent project using a direct-to-market approach.

Advances in technology and the Internet are playing a huge role in this trend.

Now it is actually cheap to produce a professional-quality video. For instance, a friend of mine works for a digital media company. They rent out video and audio studios at very reasonable prices. Recently a local hip-hop group hired the studio for an hour, complete with a cameraman. The cost? A grand total of $450. That’s all it took to professionally record a music video. That’s not a webcam 😉

And, to those who know how to leverage it, the Internet can be an extremely low-cost marketing media. Over at Go Daddy you can host a website for as little as $3.95 a month. Too expensive? You can set up and host a blog for free. It doesn’t get much cheaper than that.

This is the same kind of pattern as in the publishing industry. Aside from a few mega-writers, most authors make next to nothing from books published through the big publishing houses. Consequently, more authors are self-publishing.

You’ve heard about the citizen journalist, a term used to describe those people blogging. I’ve also spoken about the citizen broadcaster, to describe all the people (myself included) running around with microphones making recordings. And of course, all those self-published authors have spawned the citizen publisher.

And now — introducing … the citizen music mogul.

Anita Campbell Anita Campbell is the Founder, CEO and Publisher of Small Business Trends and has been following trends in small businesses since 2003. She is the owner of BizSugar, a social media site for small businesses.