Some recent links worth reading. I learned about these links from my RSS feeds for Hypebot and IndieHQ.

Wired: Vinyl is the final nail in the coffin for CD:
http://www.wired.com/entertainment/music/commentary/listeningpost/2007/10/listeningpost_1029

Hypebot: The Rise of the Music Middle Class:
http://hypebot.typepad.com/hypebot/2007/10/the-rise-of-the.html

Seattle Times: Indie rock struggling to make money in digital era
http://seattletimes.nwsource.com/html/musicnightlife/2003983861_webindie.html

Been spending alot of time re-thinking the business model of Vodka Tonic Media. I think we have done some innovative things for a company with no outside funding. And now, after nearly three years, I have to ask myself if it's time to keep on innovating, or to see what is really working in the land of indie record labels and management companies and see what ideas we can adopt as part of our master plan.

What I have come up with after reading the aforementioned articles is that the landscape of selling recorded works of indie music is fucked. Let me outline the three major formats to sell recorded music and tell you how I see where they stand and co-relate with the other formats.

1. VINYL. We agree that vinyl is the premier format. It sounds better and holds a far greater aesthetic value. The problem is that, although it is growing, 90% of the potential music buyers have no idea this format still exists. And by the time everyone gets the memo, it could possibly be considered a tired trendy. Is vinyl really stable enough to build a new company around?

2. MP3s. We all agree that mp3s is the lower tier format. It sounds the worse, it holds no re-sale value, and is the easiest to dispose of. In a perfect world, mp3s would just be available for free to everyone as a means of sampling music before you purchase the most premier products of CDs and vinyl. The problem is that the world's fastest growing music store (ITUNES) sells these disposable poor-quality files for 99 cents a pop. Therefore, bands and indie labels everywhere are signing on with CDBABY, Tunecore, IODA, and The Orchard to have their music be among the iTunes catalog. If iTunes is destined to be the world's biggest music store, can a new record company afford to not offer mp3 files designed to sell? Can they afford to give digital music away in hopes to sell vinyl to a fraction of the downloaders willing to pay the premium?

3. CDs. CDs are now considered a cliché and antiquated format. But by who? Some hip columnists? Wall Street? And maybe they will be right sooner than later. The problem is that CDs they still account for about 75% of total music sales worldwide by some accounts. For the same reason Soundscan's methods over-inflate the sales of CDs compared to vinyl, it could also deflate the true landscape since indie bands are selling thousands of CDs each week at merch tables around the world. So, can a new record company really afford to dismiss the CD as a passing format? And let's suppose you make a decision to release only vinyl with a side note to your customers that CDs are passé. Can you really afford to send a possible "if you still collect CDs you may not be hip enough to buy our brand" message to your prospects? Especially in this era of so many choices?

What I have learned from the Music 2.0 era is that what can be sold can also be given away. So is the trick knowing what your potential customers expect for free vs. what they will actually pay for? Or is the trick convincing your potential customers that what they can have for free is worth paying for?