Prince is giving away his latest CD at shows.
I'm not a Prince follower, but this story caught my eye. I understand he quit doing large venues several years ago, but he recently kicked off his first stadium tour in a while. Apparently he's raised ticket prices in order to give away a copy of his newest album to everyone in attendance at his shows. I'd be surprised if a Prince ticket now costs less than $60.
The thing is this is a totally unorthodox way for an established artist to do business. There's a huge amount of CW built up in the music industry about how to maximize sales from a given album, and this ain't it. The label people interviewed in the story are completely freaked out about this. I imagine there is much wailing and gnashing of teeth going on in label boardrooms even as we speak. I'm not sure yet, but I think that this might be serious blow to the record labels. If I'm right, it'll depend on how other bands react to this.
I think the reason this is so radical is because it's such a fundamental violation of established industry practice, even though it's such a simple and obvious idea. If you're selling CDs at a show, people have to pay extra. In a way, this resembles Microsoft bundling Explorer (et al) with Windows. The difference is that anybody who wants to shell out gonzo bucks to see artist X is also going to want an album. I bet at least 80% of audience members would think this is a good idea. This is circumventing a hell of a lot of people in the industry food chain (namely retailers!). Because of this, there's some dispute over whether SoundScan should even track these CDs. (SoundScan is the industry standard for how many copies an album has sold.) The SoundScan people say why not? The result is that Prince is selling a stupendous amount of CDs (more than he has in 13 years).
Label executives mainly see heritage acts as being able to afford to duplicate the Prince strategy. In fact, some label executives already report that managers of such bands are fascinated by the concept.
"Take this to its logical conclusion: A dinosaur act that no longer sells records but does great live business can do a stadium tour over the summer and dominate the Billboard 200," one label executive says.
This guy's been up late at night thinking about this stuff, because I think he's right. We'll end up seeing a greater emphasis in the Billboard charts on retread oldies acts if they try this same technique. The secondary effect will be a diminishing in stature of the Billboard Top 200. What that means, I'm not sure of quite yet.
P.S. As a side note, only established acts can really even consider doing this. The way this works is that the promoter of the show pays the manufacturer of the CDs. The promoter is reimbursed solely by ticket sales (most large acts won't allow the promoter or the venue a cut of merch; promoters are really sleazy people because they have to honor contracts like this in order to get huge acts like Prince and not lose thousands of dollars. But I digress). Very tiny bands (cough which is 99% of them cough) don't have the luxury of being able to negotiate with a promoter, let alone the ability to stipulate that a promoter spend all this extra money. This policy is the same thing as telling every promoter who wants to book you that you must sell out every date on this tour. Otherwise the promoter stands to lose a colossal amount of money. 1% at most of the bands out there have the draw to sell out a 3,000 seat theater in every city the play in.