Paul Granton Marketing Think Tank Suggests that Major Label Record Companies Will Disappear by 2013

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Online music subscription, streaming radio, and downloadable sites are empowering fans with a powerful discoverability tool. Nowadays, marketing music is not about big dollars but savvy digital marketing.

The recording industry has played the role of middleman for nearly all of its existence, using “payola” to market musicians to the masses.

Paul Granton Marketing (a music marketing service and think tank) believes that the recording industry as we know it will disappear by 2013, and be largely replaced by subscription services.

“The online subscription service, which has about two million users right now, is going to explode as bandwidth becomes both faster and more available wirelessly. Consumers are going to realize they don't need storage devices, just bandwidth, and they're going to love it. Yea, there will be places where wireless connectivity is not available, but that is the exception to the rule. The future, as we see it, is quite simply subscription.”

Paul Granton Marketing also noted that users of subscription services claim that most of the new music they are exposed to is on subscription networks. Services such as Rhapsody and Yahoo profile the preferences of the listeners and make suggestions based upon their tastes. This suggests the role of record labels in discovering and introducing talent to music fans is eroding.

Musicians will be able to bring their music directly to the consumer, Paul Granton Marketing suggests, because the “listen powered” functionality of subscription services will do a better job in promoting music people enjoy.

“There are many examples of music that is heard on the radio nowadays that has a disproportionate amount of marketing to talent. People are being driven to satellite and Internet music sources because the record industries have failed in pleasing the masses.”

Paul Granton Marketing predicts that more musicians will enjoy a “middle-class” income as they sell their music directly to consumers.

“Of 100 independent bands we surveyed, we found the average independent band generating $125 / month in sales, which isn't much, but we found that the highest 5% of those bands were generating $1800 or more in online sales every month. With revenues from live performances and merchandise, that gets musicians closer to making a living than ever before. These revenue numbers will multiply when subscription services become the dominant source of new music.”

Paul Granton Marketing is an independent music research group in California. The organization is not the same as the Granton Institute of Technology, or Granton Marketing (Canada) or Granton Marketing, France.


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