Why EMI's woes hold the key to music's future

The music business has to get used to enterprising interlopers, says Neil McCormick

A bad week for EMI is proving a very good week for DIY. While the multi-national record company has been forced to issue profit warnings, dispense with the services of two chief executives, and embark on massive cutbacks in the wake of disappointing sales from its superstar roster, an unheralded three-piece punk band from Colchester have exploited new download chart rules to score a hit single without signing to any record company at all.

Koopa have neither record contract nor publishing contract
"We got this far with no money/and this is what real music sounds like," boast Koopa on cheerful punk-pop anthem, Blag, Steal and Borrow. It may not have the ring of a generation-defining classic, but the message should send a shiver through the music business.

The trio, aged between 19 and 22, have neither record contract nor publishing contract. Their do-it-yourself ethic excludes expensive videos and marketing campaigns. What they do have is a small but dedicated fan base and an early adopter's instinctive comprehension of the possibilities of the new media.

Having hired the services of savvy digital distribution company Ditto Music (www.dittomusic.com), who provide the paperwork and infrastructure to comply with chart rules for a small flat fee, they have propelled themselves to the perhaps not so giddy but still impressive heights of number 31 in the UK top 40 and, more importantly, laid a path for any enterprising musician to follow.

"To release a CD single you're looking at an outlay of £20,000," according to Ben Drury of 7Digital, the download store responsible for 95 per cent of Koopa's sales. "With downloads, the cost is virtually zero."

"This should really make the majors wake up and take notice of who is creeping in through the back door," according to Matt Parsons, founder of Ditto Music. "The top 40 is no longer the playground of the major record companies.

"It has been a hard time for young bands. There's a feeling that record companies are unwilling to invest in the long haul, the touring and the overheads, and they are signing fewer and fewer new acts. But my whole business is built on the notion that there are always far more unsigned bands than record company bands, and fans actually do want to be able to buy their music."

The problems facing EMI are shared by all the multi-national music companies (Warners, SonyBMG and Universal). Their business model is dependent on delivering multi-million-selling global hits for an elite band of superstar artists. But sales of recorded music are falling and choice is expanding, with a huge smorgasbord of free music available through the internet in forums that allow listeners to feel like a participant, not a consumer.

A new musical sub-culture is evolving. Such is the spirit of irreverent invention abroad, combined with the thrill of lateral connections and accidental discoveries, that social networking sites such as MySpace and YouTube are starting to feel like a genuine alternative to the charts, and not just an adjunct to them.

The overall effect is one of almost absurd acceleration, where the journey from start-up, to release, to success (and perhaps also to disposability) is becoming increasingly compressed. And the independent sector – with its low overheads, flexibility and, perhaps crucially, its driving ethos of musical passion –looks best placed to take advantage of this rapidly changing landscape. Arctic Monkeys, last year's internet break-out, signed to independent label Domino on the basis that it could offer everything a major could, with added creative freedom.

Yet even the independents face a struggle turning the online boom into tangible sales. "Having a hundred thousand friends on MySpace is meaningless unless you've got people willing to spend money on your music," says Parsons. "It is not just about having an online presence; its about having a live presence as well, an actual fan base who turn up to your gigs."

Which is why many in the music business believe that live revenues and merchandising may, in the future, outweigh the importance of actual record sales.

EMI's problems, after all, have been blamed partly on the poor performance of Robbie Williams's latest album, which failed to take off despite the star staging the most popular (and lucrative) stadium tour in Europe in 2006.

Meanwhile, the music business has to get used to enterprising interlopers such as Koopa, bands who aren't just going to wait for the old powers-that-be to give them a break, but are prepared to seize the reins of the new media and force the pace of change.

Predictably, Koopa now find themselves fielding offers from a number of majors. If you can't do it yourself, the next best thing is to find someone who can.