He said the royalty rate is essentially the same with an iTunes sale. He pointed to the royalties artists receive on each CD sale, and put the number at about $1.60.

Yet Byrne noted that such a model won’t work for smaller or developing acts, who need a team to provide marketing and tour support.īut Byrne seemed to imply that labels are not changing as rapidly as they need to be. He said the idea of artists working completely independently of a record label is possible, and pointed to the success of singer/songwriter Aimee Mann. “Artists need help,” said Byrne, who said he’s in the final stages of negotiating a new contract with Nonesuch Records, a boutique label owned by Warner Music Group. He said at that point, record labels will be faced with a sort of choice - to ramp up marketing services to use music as a loss leader for tours and merchandise revenue, or aim only for international stars of the ilk of Britney Spears. Once download sales became the norm, Byrne said, it will allow manufacturing and distribution costs to approach zero. That year will be the “tipping point,” much like the mid-to-late ‘80s when CDs overtook cassette sales. He offered a slide show that predicated digital sales would outstrip CD sales by 2012.

REUTERS/Marcos Brindicciīyrne gave a presentation entitled “Record Companies: Who Needs Them?” at the South by Southwest music conference in Austin, Texas, Thursday. Byrne wants record labels to focus more on marketing than on manufacturing and distribution in the face of increasing digital album sales. Musician David Byrne performs at the Luna Park theatre in Buenos Aires, Octofile photo.

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