Monday, April 6, 2009

Question of the Day - April 6, 2009



David Johnstone asks:

Do you envision a transmigration by the record companies from physical offices to outlets on the Internet? It seems to me that a realm such as,, or any other social networking outlet is just too chaotic for those that demand (fans) to find their desired supply (bands/music)? Do you think the record companies may follow a Google-type model (in terms of advertising), invest millions into specific advertising/targeting methods, and essentially manifest their monopoly online? I'm not thinking in terms of money or profit from the individual songs, but rather advertising space and methods in general... it seems individual managers may or may not have the technical/theoretical know-how to reach the fans online.

Hartmann responds:

The Holodigm is designed to provide a myriad of services to emerging artists that have previously been provided by record companies. In the future there will be little need to share the revenue streams with a record company that is not owned and operated by the artists themselves. There may be a learning curve to get a band's online presence established, but The Holodgim will design, build and manage webs sites for artists. The big four will try to preserve a huge profit margin on per unit sales and will eventually collapse under their own weight. This is what happened to the movie studios. The big four will become financial institutions and online digital distributors of their vast catalogs. They will not build new acts but will try to acquire artists who have already developed their businesses online and impose 360 deals to cut into all of the artists income streams. By the time the act is big enough to interest UMG, Sony, Warner Bros., EMI, or their sub and distributed labels, the artist won't need them. In the past a record company's strength was in its ability to buy air time on radio. In the age of the ubiquitous i'Pod radio is becoming irrelevant limiting the need for record companies not owned by the artist. The major record companies will probably experiment with advertising based and subscription models; but such systems are more likely to be created by Internet entrepreneurs than the big four who still want to gouge the fan and abuse the artist.

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