Tuesday, February 2, 2010

Music industry goes Gaga to reinvent itself

If you watched the Grammies on Sunday night you saw a couple of remarkable performances. Pink controlled the night as she performed high in the air dangled upside down on a cirque de soleil type chair. But music pundits are watching Lady Gaga as the one who is transforming as the Madonna of the new millennium. Her performance with Elton John was somewhat symbolic in handing off the baton to the new generation of music performers and digital marketers. Here's an interesting passage from the Wall Street Journal that points out some interesting things about the industry and where Gaga is taking it.

She's a digital phenomenon by John Jurgensen

Lady Gaga's towering digital sales, almost all of them iTunes downloads, only tell part of the story. In fact, much of Gaga's audience got her music for free, and legally. They have listened to free streams—by the hundreds of millions—on YouTube and the other online services that Gaga currently leads, according to research firm BigChampagne. On MySpace, Gaga has had 321.5 million plays. By contrast, singer Susan Boyle tallied only 133,000 plays, despite scoring the No. 2 selling album of 2009. A difference (among many) between Gaga and the dowdy Scotswoman discovered on a British talent show: Ms. Boyle's material, including "Amazing Grace," was traditional—and so were most of her buyers. Some 97% of her albums were sold on compact disc.

Her Manager:

"That tells you how pronounced the generational divide is," says BigChampagne founder Eric Garland. When it comes to the free streams that dwarf her still-impressive sales, Gaga isn't giving it away for nothing—musicians typically earn fractions of a penny each time a song is streamed on Yahoo, for instance. While most artists stand to profit more from high-margin CD sales, being embedded across the Web can pay dividends in exposure and the loyalty of fans.
She's got a 360-degree view

The business needs more Gagas. The upheaval of the last decade has forced the major record companies to cut their work force by 60%, according to a recent report by the Recording Industry Association of America. Within the last week, dozens of Universal Music Group employees were laid off. (Gaga's own publicist took a buyout; his job won't be filled.) Labels have had to change their relationship with artists and lean on new partners, including the talent managers they often squabbled with in the past.

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