Jim Carroll

Music, Life and everything else

It’s all in the game: Zhivago, We7 and On Air, On Sale

Three music business stories in the ether this morning which may not look connected at first galnce, but are actually all part of the same conundrum. Zhivago Records in Galway has gone into liquidation with the loss of 15 jobs, …

Tue, Jan 18, 2011, 10:07


Three music business stories in the ether this morning which may not look connected at first galnce, but are actually all part of the same conundrum. Zhivago Records in Galway has gone into liquidation with the loss of 15 jobs, the We7 online streaming service with six-and-a-half-million tracks is now available in Ireland and Sony and Universal are making a big fuss about On Air, On Sale, which will see future new releases on sale in download outlets on the same day as they’re available for radio to play (it’s in the lap of the gods if this great brainwave will mean radio will actually play the tunes or if anyone will want to buy them).

The closure of any record store is bad news because it means one less outlet for recorded music and a rake of job losses. But we’re becoming used to hearing stories like the Zhivago one because the market for recorded music is shrinking at a rapid rate. As we wrote last week, bricks and mortar shops who want to remain in the books and music selling business need to innovate. Sadly, it looks as if Zhivago didn’t or couldn’t do that – I was in their store before Christmas and couldn’t believe the amount of tourist tat in the racks at a time of year when there were very few tourists in the town – and it has been forced to close.

There’s a line in the news report where the owners say the popularity of online music sales impacted on their business, which is a bit like saying that the arrival of the motor car had an impact on the sale of horse-drawn carriages. If you can’t deal with innovation in your line of business, you’re going to get found out. There is no going back to a time when the only way you could get your hands on music was via your local record store. Those days are over. But we’ll still have to probably write this story every time another Irish record shop goes out of business in the coming year and years.

Yes, it’s a given that many or most former Zhivago customers have moved online for their musical kicks. They might be buying their music from the iTunes store, they might be checking out the Eircom Music Hub, they may have cracked the Spotify code or they may well be just going to YouTube (I’d love to see some figures or a survey about the amount of Irish people who are using YouTube for their musical requirements). From this week, We7 will be hoping that a lot of Irish people use their online service. Like Spotify and Eircom Music Hub, you have a couple of million tunes you can listen away to all day long. If you put with the ads, the service is free or, if you don’t want to be a targeted consumer, you can pay €4.99 a month for We7 on your computer or €9.99 for it on your phone and computer.

Services like We7, Spotify, Eircom Music Hub and YouTube are really what are putting record shops out of business. The Average Music Fan – ie the ones who don’t read OTR, don’t go to see new buzz bands in the Workman’s Club or Roisin Dubh or Pavilion and don’t rely on record shops to find their way around foreign cities – are happy to stream their music. They’ve decided that they don’t need CDs or vinyl records any more and now, they’re beginning to realise that they might not even need MP3s any more (that may well be the case once Apple launches some new snazzy cloud-based yoke) and that streaming will do just dandy for them.

Which is where the record labels come in. Streaming services need to do deals with the labels, but the business affairs’ boyos in the labels know that the money from the streaming lads is never going to be enough to offset the loss of revenue from falling physical sales. It’s not even going to be enough to make up for the Average Music Fan not making those 99-cents-a-download purchase at the iTunes store any more because s/he can stream Lady Gaga, The Script and Coldplay. But right now, this looks like where the business is going. It’s certainly where technology companies are going and, if the business has reluctantly had to learn anything since the mid-1990s, it’s that technology companies now call the tune. They may not pay the piper as much as the piper thinks he should be paid but, well, the piper has to get used to it and probably ask someone else for more money.

Such logic makes the On Air, On Sale move smack of Spiralfrog and flexidiscs to me. Sure, it may well help dampen down some pockets of piracy, but the Average Music Fan will more than likely hear a tune on the radio (provided, of course, that radio will play those new tunes), Shazam it and check it out on YouTube. If the Average Music Fan wants to hear the tune again, he’ll go back to YouTube. Maybe s/he will buy it, maybe s/he will wait for the album or the gig. But I really can’t see how having a tune on sale the day it goes to radio is going to be a gamechanger. As with so many record business initiatives, it’s too little, too late. This should have been done YEARS ago. But instead, we’re seeing someone putting a latch on the stabledoor after the horse has ran off to Mullingar. The need for an industry-wide reset is long overdue.