Bruce Springsteen fans can download “Radio Nowhere,” a single from his upcoming album “Magic”, for free on iTunes for the next week. You can imagine execs at Sony-BMG congratulating themselves — they’re giving away a song to sell an album! — but the move only illustrates one of the industry’s core dilemmas. The label has paid Springsteen millions for the rights to release the album, and is almost certain not to recoup its investment. Springsteen, meanwhile, will make tens of millions more when he goes on tour this fall, but the label won’t see a penny of that.
This is why music companies are pushing so-called “360 deals”, where they share in all of an artist’s revenue streams: Not just music sales but concert tickets, merchandise, licensing, etc. The catch is that with a handful of exceptions, only small or unsigned bands will go for it. True, a handful of today’s small bands will be tomorrow’s Springsteens. But the future can’t come fast enough to bail out the labels.