The way Google became the massive entity it is today, is a combination of strategic M&A and the extraordinary income stream of adrev.
Facebook is quietly following the same pattern.
Advertising revenue has long been the provider for radio, television, and print.
Since the advent, and purported growth, of the Internet, it has become the singular point of income for countless companies.
When Ebay made a move in China, Jack Ma simply switched it’s counterpart, TaoBao, from a percentage model to an adrev model, and drove Ebay out of China.
Everything has it’s core income.
Apple was always about selling hardware.
The distro percentage of iTunes is a drop in the bucket.
Tivo was the first shot across the bow of disruption, causing a genuine problem for television advertising streams and rates.
The Internet all but rendered print useless.
Where I think it’s fascinating, and sad, is advertisers have little choice but to utilize the Internet as their advertising thrust and base.
However, the effectiveness is highly suspect due to the massive saturation of bandwidth and ADHD viewing modality.
But where else to go?
When your target, and captive, audience is in one place, you go there and hope for results.
Once record companies saw the stream of adrev, they knew they found the answer to the depletion of revenue.
Add to that, it was a stream that didn’t have to be shared with the creators, and it was genuine lifeline, albeit temporary.
The industry has faulted Doug Morris for having been the first to embrace Apple, and in retrospect not asking for equity, or a percentage of hardware sales, which was stupidity at its finest, in retrospect.
That is the core of the equity demands of the labels to the new companies.
“We fucked up last time. Not this time. Hand over equity.”
They comply because the creative content drives their models, which of course, drives adrev, which of course the entire model is based on.
The problem here is at the label end, much more than the distribution provider end.
The problem becomes exacerbated by the need for labels.
Let’s not continue to believe you can make things happen, on a decent scale, DIY.
It’s further complicated by a massive shift in culture.
We’re to the late 50s, early 60s, of a song environment, not artist.
That song environment is perfect for a system of listening via streaming.
And that is where it is, a listening environment, not one of ownership.
When you truly remove the rose colored glasses of altruism and hope, you can clearly see the size of the problem.
It’s not a diatribe of doom and gloom. It is merely a study of the facts.
Change will not come in the form of the people, as the people are fine with this process.
Change has to come in the form of war.
Such a war can only be waged by artists, managers, publishers, and lawyers of power and influence, not the indie sector.
It has to be fought and waged by the likes of Taylor Swift and Irving Azoff.
It has to be joined by others of like power.
Lawyers, you need to start addressing adrev, equity participation, and all other forms of ancillary revenue that labels are now sharing in.
You need to turn the tables and create a “creator” version of the 360.
We allowed, and rightly so, the labels to justify and participate in 360/NRI deals.
The logic was there, and the need to participate as direct answer to attrition, was as well.
The entire premise of 360 has been validated by the labels, so that very same argument can now be validated for the creators.
How can they argue against something they created?
That is the key to moving forward and sustaining.
This is all very simple. The 360 argument was:
We use our manpower and money to help you find other sources of income. Our income is depleted, so we’d like to share in the revenue streams we helped create.
The identical argument applies in reverse.