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Radiohead’s recent experiment with selling music directly to consumers wasn’t exactly a massive success.

So it was with great interest that I read Greg Sandoval’s recent News.com piece, “Don't miss lessons Radiohead, Trent Reznor offer.”

The most interesting observation was that:

"...the music business is probably better left in the hands of businessmen. Musicians are not the new labels. Artists need someone to provide financial support and business acumen. If we end up ridding the world of labels, we'll only have to re-create them -- in some other, probably more nimble form."

You see, making music is one thing, but marketing and distributing music requires the kind of effort that any self-respecting musician should balk at. Sandoval referred to this as 'heavy lifting', and heavy lifting is something musicians like Reznor struggle with.

On Reznor: 

"He sounded like a guy who had been working too hard. He said he poured 18 months of his life into helping make NiggyTardust. Not only did he put up his own money, he produced the album, performed on it, oversaw all of the business tasks right down to the writing of the text on Williams' website.

"Artists who sign with a label don't perform these chores. Executives packing MBAs and years of business expertise do. Is that a good thing? Not necessarily, but that division of labor helps."

Reznor himself was quoted as saying "I'm spending a lot more time being the business guy than the musician and I really don't like doing that." An admission that working at the sharp end of the music business isn't all it's cracked up to be.

Sandoval sums this up with an obvious realisation: "Perhaps an old-fashioned record label doing all the behind-the-scenes work isn't the best idea for the future of music. But someone has to do it."

As I thought about this article, it occurred to me that Reznor's / Radiohead’s experience is relevant elsewhere.

The internet has been touted as a disintermediation platform in many industries. Quite a few people have been sold on the idea that the internet can eliminate the middleman altogether for many businesses.

One of those is the agency. With the rise of online advertising and new behemoths like Google, the death of the agency is a frequent topic.

Many agencies see the Googles of the world as enemies that threaten their very existence and Google’s DoubleClick acquisition has only increased agency fears. But if the lessons learned by Trent Reznor and Radiohead are any example, it’s likely that the situation is much more nuanced.

Yes, agencies will have to adapt and learn to adjust to the new reality, but more seem to be doing just that, as can be seen by Publicis’ recent ties with Google.

The truth is that while it’s natural to have unfavourable perceptions about “middlemen”, many honestly do serve a legitimate purpose.

From shouldering risk to taking on tasks that other parties are ill-equipped or unwilling to bother themselves with, middlemen are often around for a reason -they do provide some value, even if they’ve typically had the ability to overcharge for it.

The internet may force them to change their models and limit their ability to overcharge, but the value they provide does exist and will ensure the survival of those who demonstrate an ability to adapt.

As such, I don’t think the agency itself will die. It will have to adjust to a changing world. Challenge is opportunity for those who recognise this.

At the end of the day, I believe that the internet will be a motivator for change at the agencies more than it will be a cause of death.

As Trent Reznor learned, marketing is hard work and sometimes the involvement of a middleman is desirable, even if it sometimes seems that the value of this work has been overrated.

Drama 2.0

Published 24 January, 2008 by Drama 2.0

237 more posts from this author

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BD

The Radiohead record was not a huge success??? I mean if you consider making millions of dollars almost overnight and keeping almost every single penny of that money not a success then you got me. I understand about the whole business model deal and how that ultimately should be left up to middlemen but when you are on a level that Radiohead is at, business models don't mean squat. Now for you everyday average Joe band, then yes you wouldn't last a week releasing your music on the internet for almost nothing. Yes 60+% didn't pay anything, but for the other half to actually pay something, not to mention a good bit of people paying pretty good money, you would think that this is much more favorable than putting out hard copies through some money-sucking record label who doesn't give a shit about you. And it is. Hell I paid $10. When you are as big as Radiohead is, you can pretty much do what you want and it will be very hard to call anything they do unsuccessful.

almost 9 years ago

Drama 2.0

Drama 2.0, Chief Connoisseur at The Drama 2.0 Show

BD: the purpose of my post was not to incite a discussion about how great Radiohead is or how evil the record labels are. I think the Radiohead experiment was interesting but stand by the assertion that it was not a *massive* success in and of itself. If it was, I don't think there would be so much debate over the topic; everybody would have stood in awe at the results.

I think Trent Reznor's comments are extremely insightful. They show just how difficult it is to sell an album. Reznor admitted that for all the money, work and emotion he put into Saul William's new album, he has not yet recouped his investment. That's not surprising given that EMI says only 5% of its acts are profitable.

The point of my post is that, for the average musician, labels still play a key role, even if they are perceived as overcharging, and that this might be relevant to the role of an agency in the advertising world, who in many ways, share a similar middleman role and have also been "marked for death" by some critics.

almost 9 years ago

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Musik Lover

Niggy Tardust is an enormous success. Everyone knows who Saul is now thanks to Reznor's brilliant business model. These envious music journalists are just trying to land punches on Trent and they think this is their oppurtunity. Year Zero and Niggy are being called the best 2 albums of 2007 by music fans every where.

almost 9 years ago

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Hello

Nine Inch Nails is the king of music. Everyone respects Trent and no one respects the music labels any more.

almost 9 years ago

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lovely

I never heard of Saul until Niggy Tardust. NIN and Saul are really on everyones MP3 player and computer. There's talk about them everywhere. CNET.com and econsulancy don't know there ass from a hole in the ground. I love Year Zero and Niggy Tardust.

almost 9 years ago

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Niggy Tardust

Niggy Tardust is an explosive success. Whoever wrote this article just sucks in excess.

Also, why is it so hard to see the letters in the box below. Do they not want us to share our comments for some reason?g

almost 9 years ago

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gern

"explosive success"? relative to what? it's a great experiment (in a controlled environment), but hardly an explosive success. we all want new business models in music to become a reality and it's exciting to see experiments like these get attention, but we still have a long way to go before we have a model (or models) that replaces the old skool music business.

this article is spot on - one of the most important cogs in the music business engine is marketing and i can count the number of "good" musicians who are also savvy marketers on one hand. the middle layer is critical.

rather than argue about the relative success or failure of these efforts by radiohead and reznor/saul williams, we should be encouraging even more experimentation and learning from them.

almost 9 years ago

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