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To Press or Not to Press?

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Wednesday, 12 September 2007
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What’s a multi-million-dollar industry to do? There’s no way for the record industry to hide it anymore as the loss of many record labels’ revenues have now been thrust squarely into the public eye. Variety recently reported that one of the “big four” record labels, Warner Music Group (Sony BMG, EMI and Universal Music are the other three –ed), reported losses of $27 million, or 19¢ per share, in the three months that ended on March 31, 2007, compared with a loss of $7 million, or 5¢ per share, a year ago. Revenue fell 2 percent to $784 million from $796 million.

Warner cited illegal downloading and piracy as one of the significant sources of the problem.

Meanwhile, EMI recently announced a new partnership and business venture with Puretracks.com to become the first Canadian digital music store to sell the label’s digital music catalogue in an unrestricted MP3 file format without digital rights management (DRM). Beginning immediately in the Canadian market, consumers will be able to purchase downloadable tracks from such artists as The Rolling Stones, Pink Floyd and Nickelback, as well as Interpol, Coldplay and Norah Jones. What the announcement means, ostensibly, is that Canadians now have a new alternative where they can purchase EMI digital music for their iPod, as well as MP3 enabled phones or other music players and, at the same time, means that the record industry has finally adopted the “If you can’t beat ‘em, join ‘em” philosophy as it attempts to keep up and control what happens to their products.

The music industry is most definitely changing, but into what exactly? As the big labels attempt to move forward into the new digital age while still attempting to accommodate those accustomed to physical formats, some companies, like G7 Welcoming Committee, have shucked the whole deal and become one of the first labels to distribute in what G7 co-founder Derek Hogue calls a “garbage-free” format. “Our plan is that, as of April of next year, we’ll no longer be selling or in any way be marketing music on a physical medium,” explains Hogue of G7’s move out of the hard-copy record business. “At the moment, we’re transitioning our back catalogue right now to make it all digital as well.

“Digital isn’t actually the term that we’re using because compact discs are already a digital medium,” continues Hogue. “That’s why we prefer to use the term ‘garbage-free.’ It’s the same encoding as one would get on a CD, but it’s just the music—we won’t have new product on record store shelves anymore.

“Traditionally digital music downloads have been viewed as a supplement that even we have done alongside physical product. Digital music might account for 25 or 30 percent of what we sell. Obviously, when we stop selling CDs altogether—when they’re all gone—our sales will likely drop dramatically, but we’re hoping that, with the lack of availability of the music in other formats, people will choose to start going the garbage-free route and it will eventually start to balance. We have no illusions that it’ll happen right away though.

“We made this decision because we were done and tired of being responsible for creating so much junk in a dying world,” says Hogue flatly. “So we figured we could make this decision now and do something that we felt was more ethical, or we could just stop altogether—but we didn’t want to do that, and the bands that work with us are onboard with what we’re doing.”

While G7 is not alone in its way of thinking, there are other labels too, like Magnificent Sevens, which are trying to find other ways to serve the public. “We’re going the exact opposite direction,” says president and owner of Magnificent Sevens, Davy Love. “I’m a big fan of vinyl; I’ve been collecting records all my life. I just think it’s a very real format and those that are into vinyl tend to like music more. They tend to actually like the music; they aren’t just buying it for hype, and that’s what we’re looking for.

“I think a lot of kids are getting back into collecting vinyl; something they can actually hold in their hands—it’s not like an MP3 that you can’t even see.”

Formed in January of this year, Love’s Magnificent Sevens label boasts a release catalogue of nothing but seven-inch vinyl releases—done in the way that singles used to be decades ago. With four singles currently available by such bands as The Mark Inside and Lipstick Machine and plans to increase the number of releases with each successive pressing, Mag7s is an enticing alternative for fans of the bands they release (each release features all-new, unreleased material), audiophiles and the bands themselves that grew up with the format.

“I just think it’s more important for a band to put out one great single than it is to put out an album with one single on it and a bunch of filler,” explains Love of the trends that he was seeing in the music business as what he set out to work against. “The question of whether or not a band has a great single in them has been lost I think.

“It’s a joke really, because a lot of bands have albums out and, especially now with them being so long, they end up putting out what would have been regarded as triple albums back in 1966 and they don’t deserve it,” continues Love. “I don’t find a lot of really super-great singles on any of the albums.”

According to Love, while the concept of his label may seem like a step backwards from current industry trends, he staunchly says that Mag7s will never, ever release a CD, the reason that he began Mag7s in the first place was because he saw a niche that required filling. “Last year in England, 15 percent of the sales of all music have been vinyl; it’s actually gone up 12 percent in one year alone so there is very obviously an interest,” explains Love before going on to explain his surprise at how well the format has been received in the most unlikely of ways. “Even though we’re doing vinyl singles, we’re getting play online—particularly on European Internet radio stations—and we’re also selling a lot of records in Germany and Sweden as well. In Canada, we’ll sell maybe 50 copies of a record and it’s great that 50 people here really like it, but there, we’ll sell ten times that or more.”

Word of Love’s brand of not-so-fetish-item-anymore product has begun to spread to the point that bands seek him out to release material instead of vice versa. Bands are beginning to line up to get committed to the proverbial wax and some of them don’t necessarily just want singles—they want to do full-lengths released on record and hope that Love and Mag7s will be able to accommodate them; something that Love is happy to do, but first those bands need to get with his program and share his vision. “We plan on eventually putting out full-length vinyl albums, but the bands have to work it up and earn it first,” promises Love, before adding, “Anyone that wants to put an album out on our label should have at least two or three singles done before that. Because I do own a record label, I wouldn’t want to cut off potential fans of the bands because of the medium but it is funny that I now get a lot more emails from bands asking if I’d be interested in doing one thing or another with them. They’ve even gone so far as to say that they’ll foot their own manufacturing bill, they just want us to release it.”

So which way is the record industry headed? As has become de rigeur in recent years, the only answer is that it’s growing in every direction at once. Now more than ever, the music business is becoming a service industry and all that fans need do is pick their proverbial poison; it’s all available now.

More on Magnificent Sevens: www.magnificentsevens.com

More on G7 Welcoming Committee: www.g7welcomingcommittee.com

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