Yesterday I allowed myself to look at recent events in the industry with a worried attitude. Wrong, say people who know better. Pierre Perrone at the UK’s The Independent walked the grounds of Midem and talked to some industry figures who all seem to be rather upbeat about the times ahead. Here are some examples of their quotes. Quite infectious.
“The doom and gloom people, it’s time they left and retired” – Harvey Goldsmith
”It’s tough out there, nobody’s denying it, but what do we do to get out of it? (…) How can new bands utilise the internet to help them break through? How does it all work for the fans? How do the fans hear about new artists and start to get involved with them? The new braves, Reverb Nation and Hot Spin, and all these new technology opportunities, basically help acts break through and help fans get to the acts. MidemNet showed the solutions are coming through. There are ways of connecting fans with new acts so everyone’s gung-ho. The doom and gloom people, it’s time they left and retired. Every day you wake up, somebody sends you a track to listen to or you hear about a band you go and see them live, you just get really invigorated and turned on by it. (…) We’ve got ourselves in a mess, now let’s dig ourselves out of it and just get on with it. I feel we’re going to have a great year.”
“I’m very optimistic about the future of live music” - Michael Eavis
“This is my first Midem and I got this green award. I’m very optimistic about the future of live music. People respond to an artist, they buy the records, or now the downloads and they come to the concerts. Live music, especially in Britain, is a very vibrant force. It’s very attractive and it’s good fun.”
“This industry has always lived with piracy” – Alison Wenham
“The British are good at internationalising their business – we only have 8 per cent of our sales in the UK. This industry has always lived with piracy. The supply chain has been disrupted by the demise of Pinnacle but the independent industry is mercurial. We don’t like the duopoly, Sony and Universal, routinely controlling 80 per cent of the charts and the visibility, but I’m always hopeful. You’ve got to remember this industry has been going through an agonising decline for eight years. We haven’t suddenly hit the buffers like the finance industry. So we are rather war-torn but we’re also hardened and resourceful.”
“Are music fans going to stop enjoying music? It’s not going to happen” – Feargal Sharkey
“All of us have to grapple with a little thing called evolution which has a nasty habit of sweeping you aside as irrelevant should you decide not to cooperate. But the most important thing is the music. We know 63 per cent of 14- to 24-year-olds in Britain are downloading music and not paying for it but, on the upside, we also know they are passionate about music. It registers above mobile phones, game consoles, DVDs. Are young people going to suddenly stop wanting to be creative and make music? Are music fans going to stop enjoying music, wanting it as part of their lives? It’s not going to happen. All the music industry ever did was provide a bridge between creators and fans. That bridge is always going to be there.”
“We have to accept that there’s going to be a new way of doing things” – Brian Message
“I’m really optimistic about the future of the music industry. It doesn’t mean it’s going to be easy. The gravy train of the past is gone. It was a great production line, great returns, being able to buy copyrights and own them forever. Managers used to make 20 per cent commission for no investment. We have to accept that there’s going to be a new way of doing things. Flexibility is the key. There are no rules anymore. The key word is value. Free music is a valuable part of the artist proposition. If we need to get into a market where we don’t have a base, we can do something with free music to stimulate interest. Let’s focus on that artist-fan relationship. But there’s a myriad of choices out there. There’s no one model any more. It’s not easy. Everybody needs to be creative and come up with what they think is the best plan for their artist. “
The new year in the business of music is already off to a lousy start. And it’s not even February yet. Lay-offs, bankruptcies, paltry sales, etc.
Here are some of the worst news from the last couple of days:
Are these signs of an accelerated downward trend? Or just singular results that examplify the recurring weakness of the slack season?
What do you think? Drop me a line.
International music trade body IFPI on January 16 released their Digital Music Report 2009 – right in time for the industry gatherings MidemNet and Midem in Cannes. According to these latest figures, the digital music business grew for the sixth consecutive year. In 2008, the increase in global sales was approximately 25% to a trade value of $3.7 billion.
This is of course against the backdrop of an overall global decline in recorded music sales of around 7% last year. The Digital Music Report ‘09 goes on to specify that by now digital platforms account for 20% of all recorded music revenues – up from 15% last year. Sales of single track downloads, which still are the key driver in the digital business, grew 24% to 1.4 billion units with Lil Wayne’s “Lollipop” ending up being the international topseller of the year at 9.1 million units. Digital albums experienced a growth of 36% in copies sold.
The most important global territories for digital sales are basically the same as in the physical world with the United States leading the way ahead of Japan, UK, Germany and France.
In these markets digital growth happened at very different speeds. During the first half of 2008, digital accounted for 39% of recorded music sales in the U.S. That percentage was more than four times that of Germany (9%) in the same period. This corresponds with the differences in consumer spending for digital music. While American broadband users on average spent $12.50 on digital music last year, music consumers in the UK only spent $7.80 for downloads in 2008. It’s even less in other European territories.
Even though IFPI sees great improvements in the market, the digital business is still hampered by piracy. Chairman & CEO John Kennedy explained that record companies are transforming their business models “in an environment where 95% of music downloads are illegal and unpaid for”. According to IFPI estimates, more than 40 billion tracks were fileshared in 2008.
Kennedy still plans to battle this issue by trying to come to agreements with ISPs on models of graduated response. Last year had seen a “tipping point” in that quest, he said. Meanwhile France, UK, Germany and the U.S. appear to be on the same track for this approach.
While everybody and their brothers seems to be in Berlin right now to attend Popkomm, the other big European music trade show made an announcement. Midem will open its MidemNet conference (January 17-18) with three well-known names in the business.
The opening session in Cannes will see together on one stage Hilary Rosen, Michael Robertson and Eric Nicoli. This will provide for some exquisit music industry bashing. Nicoli was ousted as head of EMI Music in August of 2007, Robertson has had his share of beef with the major labels as founder of companies like MP3.com and MP3Tunes. And Rosen, who steered the RIAA litigation against Napster 1.0, has since converted to a more liberal position on this issue. She recently called the original Napster the “greatest thing” she had seen at that time.
So the IFPI thinks they can just force the ISPs into complying with their demands by sheer will? Good luck, John Kennedy. While almost everybody acknowledges your argument that P2P traffic consumes tons of bandwidth and that some of that traffic infringes on the labels’ rights I severely doubt that the governments in EU member nations or in the U.S. will be happy with ISPs policing themselves.
To call technology companies hippies and claiming they disregard the value of music doesn’t help your cause either, Paul McGuinness. All of what you told the Midem audience may be true, but the public and legislative decision makers will only file your rant under “music industry cry baby”.
I also would like to ask: Why now? Why try to take on the ISPs now? Weren’t these industry claims just as true when Napster and KaZaA were at their peaks? But RIAA and IFPI rather sued the hell out of the start-ups and their users. Since that didn’t solve their problems they’re finally aiming for the big guys. Looks a lot like the final battle in war that’s already been lost.
UPDATE: Even Bob Lefsetz is with me on this one.
http://lefsetz.com/wordpress/index.php/archives/2008/01/29/mcguinness-idiocy/
http://music.guardian.co.uk/news/story/0,,2248544,00.html
http://www.alleyinsider.com/2008/01/u2s-manager-to-steve-jobs-please-save-our-industry.html
http://hoeferle.wordpress.com/2008/01/28/hello-world/
Die Musikindustrie bläst zum Gefecht gegen Internetanbieter. Auf der Midem wurde die Forderung nach mehr Verantwortung der ISPs im Kampf gegen Onlinepiraterie ganz oben auf die Agenda für 2008 gesetzt. Was IFPI-Chef John Kennedy schon seit Jahren predigt und worauf er zuletzt bei der Vorstellung des Digital Music Report seines Verbandes wieder hingewiesen hat, fand an der Croisette ein lautes Echo: Internet Service Provider haben nach Ansicht der Musikbranche eine Verpflichtung, den illegalen Datentransfer über ihre Netze zu unterbinden.
Besonders die Haltung der französischen Regierung wird dabei immer wieder exemplarisch genannt: Präsident Nicolas Sarkozy will, dass wiederholt überführten Filesharern der Internetzugang gesperrt wird. Die Regierungen Europas sollten dieses Modell schnellstmöglich übernehmen, so Kennedy.Einen prominenten Fürsprecher für diese Position fand die IFPI nun in Paul McGuinness, den Manager von U2 und P.J. Harvey.
In seiner Midem-Keynote sagte McGuinness, die ISPs zerstörten die Musikindustrie mit ihrer laxen Haltung gegenüber ihren filesharenden Nutzern. Die Technologiefirmen des Silicon Valley „mit ihren Hippie-Werten“ und ihrer „Geringschätzung für den wahren Wert von Musik“ hätten nun lange genug auf dem Rücken der Urheber von Onlinepiraterie profitiert. „Ich schlage vor, den moralischen Druck auf individuelle P2P-Diebe zu lockern und ihn statt dessen gegenüber diesen Multimilliarden-Dollar-Industrien aufzubauen“, so McGuinness in Cannes.Die ISPs könnten sich nicht länger aus ihrer Verantwortung stehlen, indem sie sich ausschließlich als Anbieter einer Infrastruktur bezeichnen. McGuinness verglich die Netzbetreiber mit Verlegern, die in ihren Publikationen Anzeigen für gestohlene Autos drucken und zugleich die Bezahlung und die Übergabe des Diebesguts koordinieren. Technolgiefirmen vergäßen nur zu gerne, dass die „Killer Application“ meist die Musik an sich sei. Daher verlangte McGuiness von den ISPs zweierlei: „Erstens, übernehmen Sie die Verantwortung für die Musik, die sie vertrieben. Und zweitens, beteiligen Sie die Urheber und Rechteinhaber an Ihren enormen Umsätzen.“ Die Reaktion auf diese Breitseite wird nicht lange auf sich warten lassen.
