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FROM THIS EPISODE

This is Celia Hirschman with On the Beat for KCRW.

This week, I attended an invitation-only record industry summit in LA.

About 50 mid- and high-level players from all sectors sat in the backyard of an attorney's home in Mandeville Canyon to discuss the plight of the business. The discussion was moderated by Eric Garland of Big Champagne. Big Champagne monitors music downloads, streams and bit torrents on the web. They are in the best position to identify Internet users' behavior in music.

Eric began with an analysis of the current market. With the exception of sales driven by vehicles like Nickelodeon TV or American Idol, most artist sales are dramatically down. He continually reminded the group that the record business has “traded analog dollars for digital dimes”. The phrase underscored how CD album sales have been replaced by singles' purchases.

Herbie Hancock, the jazz musician, offered the most valuable insight, asking the crowd of businessmen to get smaller and more flexible. While some tried to justify their scale, (and therefore their salaries), Herbie's sobering words were the take-away for the day.

Following the first round of discussions, we broke into smaller groups. I sat with the head of business acquisition for one of the big four labels. I asked him why an artist should sign a record deal with them? For the money he said.

That's been a mantra major labels have been saying for a while now.

But money is not the only issue. When major labels did rule the roost, it was through a closed ecosystem. The big labels controlled the money, the production, and the distribution. In addition, their influence could be felt at radio, in newspapers and even on the net. But today, the situation is completely different. Advertisers drive commercial radio stations, music print has lost much of its relevance, CD production can be found in any computer and distribution is widely accessible to anyone. So while major labels offer money, money is not the solution for most artists' careers. Artists need relevant marketing drivers far more than they need money.

One company hoping to solve the marketing dilemma is Topspin. Topspin is a technology company, specializing in marketing bands. Headed by internet guru Ian Rodgers, Topspin connects with social networking and fan-based websites, using complex mathematical logarithms to reach audiences looking to discover new music.

Ian Rodgers will be giving a keynote presentation at the upcoming Bandwidth Conference, which takes place in San Francisco next Thursday and Friday. At the same conference, I'll be interviewing another keynote speaker, Jeff Price from TuneCore. TuneCore is an online distribution site that has paved the way for anyone to get their music sold on digital sites like iTunes, with no long-term contracts or commitments. They too base their services on complex mathematical logarithms.

The record business needs more innovators, not imitators in the coming years and clearly technology plans a critical part. It is organizations like Topspin and TuneCore that shake up traditional business to bring new opportunities for artist success.

This is Celia Hirschman with On the Beat for KCRW.

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