Brent Kearney

A Vancouver music label, Nettwork Productions, seems to be the first big label to really understand how screwed up the music industry is, and to realize that there is more opportunity in music than there has ever been. They realize that file-sharing is a good thing for artists, and they encourage fans to download the raw data used in making recordings so that they can create their own remixes from it. Nettwork represents several big acts, including Avril Lavigne, Dido, Sarah McLachlan and Bare Naked Ladies.

Wired magazine reports that the creative genius behind the company is its CEO, Terry McBride.

“For decades, people in music have used the number of albums sold as a measuring stick for success,” McBride says. “We’re trying to get people to see beyond that. It’s about revenue from music, however you make it – selling concert tickets, licensing to TV, or selling packed USB drives.”

When Nettwerk manages a band, the band owns their own label and retains ownership of their intellectual property, which gets them $5 or $6 per CD sale, as opposed to the traditional $1 or $2. Nettwerk sets about the business of selling the music, not plastic discs, and takes 20% as its share of the profit. This stands in stark contrast to the vampires that make up today’s recording industry. The RIAA whines about declining CD sales, when they don’t realize that music is about more than plastic discs:

The market for music is thriving. With the rise of peer-to-peer networks, the iPod, and other digital technologies – plus a 100 percent jump in concert ticket sales since 1999 – the world is awash in music. The industry now has more sources of revenue – ringtones, concert tickets, license agreements with TV shows and videogames – than ever before.

Nettwerk has embraced technology and empowered fans to help market music for them. They setup software to track how many CDs fans have recommended and sold to their friends, and rewards them with prizes. This is only the beginning, according to McBride. They plan on becoming somewhat of a venture capitalist for bands:

“Once we have access to all the intellectual property, we’re going to offer shares in individual artists and take in equity investments,” McBride says. “Eventually, a major band could be its own public company.” The key, he adds, sounding like an overzealous investment banker, is that the value of a band would be measured like a stock and would receive capitalization in expectation of future earnings. “At that point, even a band selling 100,000 units a year becomes profitable,” McBride says.

A visionary like McBride is just what the music industry needed. Hopefully bands will hear about it and flock away from the big labels as fast as possible.

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