The New Creative Economy
Great music, video games and films continue to be created and enjoyed by huge audiences, while many large traditional distributors in these industries are seeing steady declines in total revenue. The Internet is chipping away at the role of the middleman, whether it is a record label, game distributor or film studio. Simultaneously, the Web is empowering the artist and providing unprecedented channels for direct distribution and now, major sponsorships. Is this the future of the entertainment industry?
Panos Panoy, Sonicbids founder/CEO, recently wrote a very interesting post on the changing guard of the music industry. His post “Are Consumer Brands the New Record Labels?” analyzes the stream of deals that major brands are increasingly offering to independent musicians via Sonicbids. Panos notes, “major (and niche) consumer brands have figured out that music can help them sell whatever product they produce,” and thus have started to work directly with unsigned artists to provide them with music for a variety of promotional campaigns. One can certainly see how this scares record labels – if bands can produce high quality, professionally recorded music on their own dime, completely own their publishing rights and then make a profit on their music through licensing songs to Coca-Cola directly through the Sonicbids online platform, why would artists ever want to sign on to a record label who will take the lion’s share of the profits from their music?
Similarly, game developers are now releasing games online that people would normally have to pay to play, but large brands are starting to come in to sponsor the games to make them free, here’s an example. Online game network and LaunchSquad client, Mochi Media, has steadily seen more game developers leave big distribution companies to start their own production companies, allowing them to create their own games, retain all rights to their intellectual property and distribute their games to the world via the Web and mobile platforms like the iPhone. A good example is the wildly popular game catalog created by Sean Cooper, a former game developer for EA Sports.
Even in film you are starting to see some similar trends. Though distribution to theaters will always be a big money game, increasing bandwidth speeds and HD quality video players are making the Web a real platform for film distribution. An interesting example is the recent short by Director, Barry Jenkins, who is known for directing the indie film hit ‘Medicine for Melancholy.’ Jenkins created a short film called Tall Enough, which was funded by Bloomingdales of all companies, and now streams on the company’s site.
Is this direct consumer brand/artist relationship the future of the creative economy? And if so, will artist development suffer as a result of the lack of artist rep firms like record labels who (supposedly) nurture the talents of the artists on their roster? If nothing else, it does seem that if this type of consumer brand/artist relationship increasingly becomes the norm that the modern artist will need to have the somewhat rare combination of very strong creative and entrepreneurial skills to reap the rewards of this new system. But maybe that is what the digital generation is all about – only an Internet connection needed.
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Suzanne Lainson
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Walt Ribeiro