November 22, 2004
Wired News has a feature on Weed today. Also, there’s a fascinating article in the NY Times about Universal’s online-only label. Apparently, they’re focusing on bands with small, established audiences – lower reward here, but probably lower risk, and overall pretty inexpensive for the label. The artists have to pay their own production costs, but such costs are now rapidly dropping. Meanwhile, it appears that they get a bigger royalty cut than they would in a typical major label CD deal.
Both articles demonstrate the potential effects of digital technology changing the industries’ cost structure and in turn the relationship between content creators and intermediaries. Creators have more flexibility in how they release their works, with less reliance on intermediaries, and perhaps greater potential for success given the lower upfront investment needed. At the same time, intermediaries are also increasing their flexibility. Universal’s online-only label is basically just a marketer, with some added transaction facilititation responsibilities. Weed manages transactions and facilitates consumers acting as legitimate distributors, cutting out middlemen.