Often how a new technology changes media industry gives an indicator of how it will change the others. Media is normally the first to be disrupted by any new technology. One of the first industries that personal computers had an impact on was publishing industry. It became a lot easier for anyone to be a publisher. The Internet fundamentally broke the entire funnel. You don’t need to own a printing press to say something. You can write it on the web. While newspapers still exist, they have become irrelevant. Nobody wakes up excited to be working inside a printing press. Even the New York Times of the world are having a hard time.
In that regard, music record labels have proven to be unbelievably resilient. The looming disaster in the early days of Internet from Napster, to Apple having the bigger pie of the profits with iTunes Store, to seemingly streaming services taking away anything left. They have survived them all. So why record labels still exist? Let’s start by what a record label actually does.
In the pre-Internet era, a record label had three jobs (loosely categorized):
1. Provide Funds and Guidance: As an artist, you were dependent on the record labels to fund your music. It was almost impossible to do it on your own. You needed equipment for creating, recording and editing music and you needed guidance and support of other people to help you in these and other tasks.
2. Business Deals: How someone is going to discover your music? You needed to appear on TV and Radio and record labels had a control over these deals. It’s not that you couldn’t do it on your own. But this was, and still is, a highly specialized job. And it’s hard.
3. Distribution: You needed CDs and Cassettes to reach your audience. This is the printing press of music.
Now, let’s look at how these have changed with the Internet. The only job that’s truly affected by the Internet is distribution. It’s now easy to distribute your music with streaming services, YouTube etc. You don’t need to make CDs and Cassettes. Although I will argue here that CDs remain a big deal when it comes to listening music even to this day. The rest of the two functions of a record label remain as they were. You still need support, guidance and business deals. Radio is still big when it comes to discovery.
You can argue that it’s easier for an individual artist today to make it on her own than it ever was. And that’s definitely true. You can record a decent quality song using nothing but your computer. You can learn things that you don’t know from YouTube, Shazam etc. And you can probably avoid dealing with radio and TV by directly going to stores like iTunes or streaming services. And if your work is good enough you will get the listeners you need. But all this is easier said than done. There is nothing like having a record label behind your back. Think of them as VCs. It’s easier than ever to start your business but demand for VCs is higher than it ever was.
There is a reason that even stars like Beyonce, Taylor Swift and Adele are stuck in their massive deals with record labels.
Keep this in mind and now think about streaming services like Spotify, Apple Music, and Patari. They have little to no leverage in the whole system—despite all the hype. Because essentially they are just a funnel—a way to distribute music. But so is Google—a funnel. Yes, but Google has the unlimited number of suppliers. Almost everyone writing on the web is a supplier to Google’s funnel. Content creation on the web has been democratized in a way that music has not. When you have that much abundance in the production, the value shifts to the curation. And that’s what Google has been reaping the fruits of.
But music? Music that you and I want to listen to is under the control of few big record labels. Not just the new music but the old one—the archives. As a streaming service, you need more music to attract and maintain your users. And your suppliers are essentially a couple of record labels. There is no abundance at the bottom. It’s scarcity. And that transfers the power back to the content creator, in this case, record labels. Until you pull the switch and turn everything on its head.
Until you become the record label you need. Tabeer and Fanoos are the first steps Patari doing exactly that—or at least they can be.
The team deserves all the credit here because this is so groundbreaking. The real value of Patari is not to give me coke studios or the latest Ali Zafar. I am going to get those anyway. The real value of Patari is giving me something that I cannot otherwise get i.e. Tabeer and Fanoos. And if the artists they are tapping good enough and the team are smart, they can disrupt the stronghold of record labels from the ground up.
There will be challenges, of course. 1) Like I said above these are specialized jobs. There is a reason why even Apple is not going there. 2) It requires a lot of money. 3) You endanger your relationship with record labels which as a streaming service you can’t afford.
An imminent challenge for Patari right now is discovery. I know Tabeer because I knew Patari already. Patari needs to figure out a way where people can discover music on their platform without necessarily signing up for their service first. I am talking about Radio.