Lars Ulrich, drummer for uber-band, Metallic, sat with the LA Times for an interview. Lars has been an outspoken critic of P2p and file-sharing. And he’s a self-admitted Luddite. Wrong side of the past decade to be on.
But as I noted a few months ago, Metallica’s record deal is soon up and Lars is correctly saying that Metallica doesn’t really have a need for a major label anymore:
“The primary — not the only, but the primary — function of a record label is to act as a bank. When you’re fortunate enough to be successful and so on, you don’t need to rely on record companies as the banks. . . .”
I read Lars saying “bank” to mean “venture capital firm.” He’s Danish so I give him the ESL room in the quote — but he’s right. A&R is like venture capital. Signing a bunch of bands and paying for their records — an up-front against future royalties — is a lot like making a bunch of VC investments in fledgling companies. Most will fail but the few that make it will repay the risk with fat rewards.
But Metallica isn’t the first successful band. After all, The Rolling Stones and U2 and other massive bands stayed with their labels well after “success” was a given in a stratospheric career. If a major was just about being a VC firm, post the first deal those bands would have left their majors. They didn’t. They got more money. They got a bigger piece of the pie. But they stayed with a major. Until recently.
Now we can point to guys like Trent and Paul McCartney and Radiohead ditching the major label machine. If it’s not about the VC, what’s different.
It’s about the marketing and distribution.
No longer does radio and MTV rule. And one needed a label to get any kind of play on either.
No longer does physical distribution — with all that logisitics and fixed costs — matter. I can’t even find a record store near me — if I even wanted to.
Lars and Metallica can leave Warner because Warner doesn’t control marketing or distribution anymore. The bank part? Not important to Metallica.
But that doesn’t solve the whole problem. The new world of marketing and promotion independent of a major is still evolving. There are a bunch of service companies stepping in to try and fill the space but everyone is still groping in the dark. The dollars are smaller, the background noise is louder, and the possibility of screwing it up is bigger.
Sure, going back to a debt-laden major which spends all its time suing your fans and pissing them off as the world marches by the window isn’t the brightest move. Unless they’re offering a huge guarantee which is hard for them these days — see debt loads. But wandering out the door into the wilderness and saying, “I can do this myself” is a pretty crazy tact too. Plan carefully, hire smart people, triple-check the technology. Then go.
Back in SF, Lars used to bring a friend of mine that dark, salty Danish licorice she missed so much. He was really nice about it. He’s not a bad guy. He got caught on the wrong end of the P2P arguement because he didn’t understand what it all meant.
It’ll be an interesting to see what Metallica ends up doing. My guess? Another nail in the major label coffin…
