This Article Originally Published December 2003
How do you stop people from illegally downloading music?
As my friend Jim Griffin taught me years ago, the goal is to make music so convenient to get that stealing it is a less desirable option.
How do you do that?
By shifting the power from the record labels to the consumers and the artists. I've created a model that I believe will accomplish that and ultimately improve the record labels' bottom lines.
What is the "Laskow" model?
I didn't come up with the entire model. I've just amalgamated some other people's ideas, and put a bow on it.
By keeping the record labels in the picture, dramatically reducing their overhead, and reducing the risks they currently take. Other models I've seen don't improve things for all parties involved. I think mine can.
How does it work?
Subscription music services that offer all music by all artists in every genre as streamed content will proliferate. Consumers will no longer need to own CDs or download MP3s and burn CDs because they'll have any song they want, any time they want it, wherever they are -- via cell phone with headphones while jogging, satellite radio in their cars, and by landlines when they're home or in a hotel room Singapore.
Music lovers will design their own playlists -- kind of like personalized radio stations, or they might choose to use pre-programmed, "canned" lists. Record companies will no longer need to spend a fortune to find talent, and manufacture, market or distribute the CDs.
Because millions of people will automatically hear the new song when it debuts on the "New Country" playlist. They'll hit the "Add" button if they love it, and want to add it to their list, and the "Delete" button if they don't.
Will all the "oldies" be available as well?
How will the artists get paid?
A penny per listen. That's a $100,000 if ten million people listen to the song globally in a month. That money will get split up among the artist, songwriter, and producer, and the payments will be calculated and disseminated automatically by computer every month. If just ten percent of the listeners who are exposed to the song add it to their playlists, then the artist could make $10,000 per month from those spins. And that income is just from one song.
If you don't have record companies, how does the new talent get discovered?
We'll still have record labels, but they won't need to find talent the same way they do now. The artists will come to companies like TAXI to get a "J.D. Power" stamp of approval -- of sorts.
The music providers will add them to their "jukeboxes" if they meet a minimum standard. That will allow artists who can't currently get signed a chance to find their audience and earn a living. That's not possible now because there are limited resources at the labels, limited slots on radio playlists, and a limited number of stations. The cost of CDs also prevents consumers from enjoying as many artists as they'd probably like. Their resources are limited as well.
In my model, labels could simply track the most popular songs and contact those artists to see if they'd like to kick it up a notch using the labels as investment bankers for tour support and other forms of marketing to boost the number of spins they get per month. Instead of the artist getting a piece of the label's action, the tables would be turned. The labels would buy into the artists income.
Does all this mean that consumers will have to sift through a bunch of mediocre or just plain bad music to find the good tunes?
No. I said "minimum standard," not "no standard." Again, remember MP3.com proved that consumers didn't want unlimited choices.
It also means that consumers who love a type of music that might be obscure in today's model will be able to find it easily in the future. The small, independent labels those artists are signed to now can't afford to market them globally because their return on investment would be too small. In my model, the artists will reach a much greater audience, and while it may still be small compared to Madonna's audience, it will be large enough to provide them with a much better income than they earn now. Essentially, we'll be saying, "Everybody who likes Folk Music with bongos enter here, rather than trying to find radio stations who will play something that "obscure."
How does your model improve things for record labels?
First, by growing the active consumer base in a very big way. Many more people will consume music if it's easier to get it.
Second, by giving them a way to make thousands of small investments in thousands of songs versus a few huge investments in a few artists -- most of which end up in the red. In my model they'll get a smaller return, but on a much greater number of artists and songs -- most of whom will be profitable because all the promotional and distribution expenses will be eliminated.
And finally, all the parties involved win because album cuts will be looked at differently. Labels won't be funding albums with just two great songs. Artists won't feel pressured into making "hits" because they can still earn money from songs that may appeal to a smaller number of people. And consumers will enjoy not being forced to buy an entire album to get the two songs they love the most.