Another thing we would have loved to hit while in Austin last week was David Byrne’s “Record Companies — Who Needs Them?” talk — which suggests new marketing models for an industry that, he says, will see digital sales out-pace CD sales by 2012 — at the Austin Convention Center. Like last time, he used powerpoint (you know he loves it) and even threw some Malcolm Gladwell in there for effect (via NYT).
 will be the “tipping point,” much like the mid-to-late ’80s when CDs overtook cassette sales. Once download sales became the norm, Byrne said, it will allow manufacturing and distribution costs to approach zero. “That is a fact,” he said.
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.
The emphasis should shift, he says, to marketing, promotion, and facilitating artists’ tours; let the music go digital, let the live show be the new cash cow. But for now, the old way of thinking prohibits his vision for digital embrace:
But first, he said, labels will have to remove their digital rights management (DRM) copyright-control technology. He said he buys most of his music online via eMusic, or obtains it illegally, due to the file constraints on files sold on iTunes. Byrne predicated that once DRM is removed, iTunes will no longer “have a monopoly,” and labels will be better prepared to deal with Web sales.
And when someone from the audience expressed dismay at a future of downloads because of decreased sound quality, David replied:
It’s kind of sad, but I think of it as a boost for live music. As long as it doesn’t get to be too horrible — the sound quality — they’ll go for convenience and accessibility. It doesn’t have to sound good to move people.’
The live music junkie played a secret set in Austin, too. We knew it would happen, but no one had info. Turns out he played with guitarist Mauro Refosco’s band Forró In The Dark at the San Jose patio, singing on their tunes and some from his Uh-Oh. Bummed we missed it! Anybody go?