As the Future of Music Conference closes, artists still lead the way in providing new business models

November 2009

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As record labels struggle to survive the digital change it seems to be artists who are taking the lead in finding new ways to monetise their music. But as consumers want cheap (or free) music, on demand and with no strings attached, the key questions posed at the Future of Music Conference was which of these varied goals were achievable and who will lose out in the race to the digital future – or indeed will everyone lose out in the long term as labels collapse, artists fail to develop and fan’s lose a vibrant music business providing and promoting new music. At the top of the Summit agenda was net neutrality, the principle that keeps the Internet equally accessible to all users. A few major corporations have advocated tiered access to the Internet based on the ability to pay, a notion strongly rejected in keynote speeches by Senator Al Franken (Democrat, Minnesota.) and Federal Communications Chairman Julius Genachowski, who will oversee the rulemaking process on net neutrality getting underway in the next few weeks. But Franklin and Genachowski also said that any Internet activity that violates artist copyright could not be tolerated. “Enforcement of copyright and laws of network openness can and must co-exist” Genachowski said, but how file-trading could be monitored for illegal activity while unfettered Internet access is maintained remains to be seen. UK artist manager Pete Jenner argued that “copying can’t be stopped” adding “I have an interest in getting paid, but we have to stop thinking of the Internet like a shop and more like a radio station”. Jenner went on to say that the music industry is clinging to a business model built on mass-produced “small bits of plastic” sold inside physical stores. “The less we think about how we did it in the past, the faster we’ll figure out how to make money,” he said.  The Future of Music Coalition argues that strong guidelines that favour net neutrality will make Internet access less costly and more widely available to more people, and serve to drive consumers to legitimate digital music stores that will put more money in the pocket of artists. But first there must be stores that offer more attractive products than free peer-to-peer networks. As U.K. singer-songwriter Billy Bragg wrote in a recent editorial, “…we will not be able to marginalize the pirates until we can offer accessible, easy to use, fairly priced alternative business models that people will actually want to buy their music from.”  One such service could be Spotify, which debuted in Europe last year. Daniel Ek, the Swedish founder of Spotify, has created a music platform that is fast, easy to use and more versatile than traditional music stores. It offers consumers a variety of options in accessing, paying for and sharing music, and shares revenue with artists from a pool of revenue created by downloads, advertising and subscriptions.  But Ek said the service’s U.S. debut is still a few months off as it works through a maze of licensing issues with publishers, labels and collection agencies. To create a new above-board music platform in America under current copyright law requires big reserves of money, lawyers and perseverance (more on this in the following article). Johanna Skelton, Google’s senior policy counsel argued that “The Internet is a simple distribution platform … [but] we’ve made things unnecessarily complex”.

The seminary heard calls for a music rights organisation, a one-stop shop to deal with all licensing issues but that such calls had gone unheeded. Meanwhile, artists who have moved outside traditional record deals are forging alliances that allow them to be more agile in responding to consumer behaviour.  Radiohead, who released their latest album, ‘In Rainbows,’ through their web site and ended up selling more than 3 million copies (albeit at various prices), has been leading the way. Since then, the British quintet has released a steady stream of digital music, some of it for free, and engaged fans to participate in making videos. Brian Message, a member of the band’s management team, said, “There’s a globe out there to be reached. It’s not about protecting the copyright-trading game. Sometimes it can be good to give away music.”

Indeed other initiatives in October also pointed possible ways forward: First off Robbie Williams kick started his somewhat stalled career firstly by appearing as a mentor on ITV’s X-Factor with a wave of publicity and then, in a similarly heavily advertised promotion, the UK’s Mail on Sunday of the 11th October included a special free CD which will include twelve Robbie Williams hits (including ‘Angels‘, ‘Rock DJ’‘Let Me Entertain You’ ) and a multi-media element designed to plug into Williams new album ‘Reality Killed the Video Star’ created by Music Technology which uses a platform called completemyartist. As well as some 30-second clips of tracks off ‘Reality Killed…’, and the video to the first single off the long player, ‘Bodies’, there will be this little widget thing that provides playlists compiled by Robbie including both his own music and music by artists he admires. The multi-media element checks what music is already on a user’s computer and recommends which tracks they might want to play, and other tracks they might want to buy. As Robbie also continued to be the centre of attention as gossip swirled about the possibility of a Take That, on the BBC Amy Winehouse launched her comeback in a cleverly positioned role as the mentor to, record label of and backing singer for her 13 year old god daughter, the hugely talented Dionne Bromfield whose first TV appearance was on the family orientated show Strictly Come Dancing. And in the USA, Public Enemy have said they will avoid using a record label by using the SellaBand financial engine to raise alternative finance. SellaBand provides funding for artists who need upfront cash to pay for an album project by raising monies through the fan community giving artists have more creative freedom, financial control and ownership of sound recording copyrights. Public Enemy’s Chuck told reporters: “SellaBand’s financial engine model goes about restructuring the music business in reverse. It starts with fans first, then the artists create from there. The music business is built on searching for fans and this is a brand new way for acts to create a new album with fans first, already on board”. So far the band have $50K in the bag!

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