New and old ideas clash in music

by Mark Charmer.

Anyone trying to understand the changes currently being shaped by digital technologies should be following the music industry, now a melting pot of the most exciting creative minds and most desperate defensive practices. The creation of new, better, cheaper distribution channels and the trending of digital content towards 'free' has wreaked havoc on existing business models. Always a creative industry, the creative tensions between those seeing this as an opportunity and those seeing it as a threat are now seismic.

Two events prove the war is far from over between the progressives and the defenders. Paul McGuinness, manager of rock group U2 while at Midem, the music industry trade show, held in France, was reported as arguing for battlelines to be redrawn:

“I suggest we shift the focus of moral pressure away from the individual P2P file thief and on to the multibillion dollar industries that benefit from these countless tiny crimes. The ISPs, the telcos, the device-makers.”

Interesting. Apparently he got a lot of applause, too. It gets better:

“We must shame them into wanting to help us. Their snouts have been at our trough feeding free for too long.”

Sure.

Far more sense was spoken at last week's DLD08 debate "What's Music Worth?" You can watch a great video summary here. Rather than start by asking what the owners of back catalogues should do to defend their old profit models, it more sensibly asked what new artists are doing to make money - because of course now they no longer need to wait to be signed before they can start producing and distributing music.

One such artist was Swedish musician Krister Linder, who has done just fine by promoting himself independently. "I need to keep [my music] pure from any economic agenda, or I would sound different. I wouldn't sound like this if I wanted to earn a buck on my music."

Pim Bettist of Sellaband set out some fascinating options for the future:

"If there's a rich guy saying I'll give you money he's going to influence you - I want you to sound like this. But if you yourself had the money to produce your album, you can produce to sound exactly how you want it to sound."

Pim Bettist's model goes like this. You, as the artist go online and make a profile. People listen to your music. If they really love your music, they can invest ten dollars so you can produce an album. Once fifty thousand dollars is raised (which is 5000 people), the money raised is used to record the album and distribute it to fans. Money that's made through the music is shared equally between you, your fans and Sellaband.

Frank Briegmann at Universal made a lot of sense too:

"On Myspace you have one million artist pages, and then you have 600 net labels. You have an ocean full of music on the net. How to bring the consumer's attention towards the artist. Work also creatively with the artist on marketing and promotion."

He admits the firm has had to change its model, in the wake of technology. Wherever music is marketed, recording revenues represent about 30 per cent of takings. "[We now] try to be a service company for the artist to really serve his needs."

Stefan Glazer at Last.fm describes the A&R department in big labels as running an expert filter.

"It's like the whole music industry from the very beginning. You've always had radio DJs, video DJs, A&R filters. These are all professionals who get paid to find the next big thing. But like other marketing stuff, too much research leads to less creative processes. Companies like Myspace belong to the wisdom of the crowds. When music is digitally produced and digitally consumed, it's a much more efficient way [to handle this process]."

Of course, somebody at the end of the day has to pay for the music. Back to Bettist:

"There's a spectrum of very passive music lovers, and on the other side, very active music lovers. I think very active music lovers should be able to make money by discovering music and the passive listeners should be able to pay for the music that they want to buy. And how you make this model, I don't know, but that's the way it should be."

Back at Midem, McGuinness continues:

“For me the business model of the future is one where music is bundled into an ISP or other subscription service and the revenues are shared between the distributor and the content owners”

He'd better get on with suing Apple then.

Posted by Mark Charmer, director of The Movement Design Bureau, a think tank that monitors global design trends.

Comments

[Jackie Peters]

Hi Mark,

Nice post. It's interesting to see the control slowly shifting from a company down model to a consumer up model. I think the social web has created an environment where more control has shifted from the studios to the artists and to consumers.

Another artist of note is Jill Sobule here in Los Angeles, she raised money from her fans, to the tune of over $80,000 to produce her next album. http://jillsnextrecord.com/

I still think there's a place for the studios in all of this, they do after all still have a great infrastructure and dollars behind them. It may just require a bit of a shift in terms of business model and what sort of role they play.