Chris Mclellan and myself from The Music Void had the pleasure of attending the EconMusic conference yesterday. The irony of the event being set amongst the dinosaurs of the Natural History Museum in London was lost on no one.
Kicking of the day’s event was Geoff Taylor CEO of the BPI. He stated that only 9% of all tracks downloaded on the Internet were downloaded from legal digital music retailers the rest were illegal downloads. It was noted that the recent signing of the MOU between labels and ISPs is a positive step in the fight against illegal file sharing, where UKs six largest ISPs will begin.
It was made clear by Geoff that “ISPs cannot wash their hands of [this issue], they have a responsible role to play”. A great question raised was when does music stop being something you own? One has to wonder if according to Geoff Taylor that there is “no way, ISPs would cut off customers”, one has to ask the question; how effective letters will be in deterring consistent illegal downloaders?
The first panel was focused on Paying vs. Piracy and focused on which commercial models will work in turning pirates into legal consumers of music. Along for the ride were Ben Dury CEO at 7Digital, Eric Johnson President and COO of Wolfgang’s Vault, Thorsten Schliesche, VP Sales Marketing Napster Europe and Maria Shapiro, Business Development Director for Broadcast and Online at the MCPS PRS alliance.
There was a great discussion on DRM vs. player interoperability issues with many noting that apple only came to the table offering MP3 when it had a global market share of 75%. It was mentioned that the music industry has taken a bashing thanks to Apple spinning the real issue and blaming labels when it actual came down to iTunes not being willing to allow interoperability with its devices. To date I would like to know why the industry has not put up a robust defense against this falsehood spun by Apple?
According to everyone on this panel it all comes down to user interface and user experience. I would gladly agree with this and suggest that in terms of music and user experience mobile operators and handset manufacturers really need to push the innovation button if they are going to ever have a good chance of at least equaling the functionality and user experience of the iPhone.
The mobile panel was one of the strongest mobile panel line-ups I have seen in a long while with Paul Zmood Head of Business Development Music at 02, Tom Erskine Head of Go to Market at Nokia, Tom McLennan Head of Music at Vodafone UK and Ian Henderson VP Digital EMEA at Sony and Mark Mulligan form Jupiter Research moderating the panel.
Ian Henderson noted that revenues from mobile had dropped in the last year and noted that mobile income had to be improved. Nokia was clear that they do not want or need to create a fraught relationship with the operators and Tom Erskine stated that in actual fact they “want to grow the pie with them – we cannot do it without the operators; they have the customers, they have the networks”. 02 made it clear they saw more value in branding associated with the live side of music as opposed to retailing music via mobile.
The virtues and success of Vodafone’s music-station product were also discussed with Tom McLennan noting that uptake had been very good. Very little was stated by the only label on the mobile music panel. Next time round I would love to see a label being a bit more open and interactive about their thoughts on revenue shares and relationships with mobile operators.
The social media panel was a blast and all panel members were very open and upfront on their respective positions. Spencer Hyman COO at Last.fm, was very clear that he thought it essential that all new music business models pass on part of their revenue to the content owners (artists) and that Last.fm are indeed doing so. It was interesting that no one mentioned that you required 20,000 streams on last.fm to earn just £1. Not exactly a level that makes it viable for artists or their label partners.
Billy Bragg artist and artist rights activist extraordinaire was straight to the point with his statement that “everyone’s making a shitload of money, it seems, except the content providers”. Reinforcing his point, he ask the audience how much did Myspace make form advertising last year? The response was around $800 million. Billy’s question of “how much do [Myspace] pay for content?” had the room go extremely silent. He went further stating that the principle of paying content providers is essential and needs to be rectified.
However, Billy had a further very clear salient point that in order for artists “to make a living, the industry has to recognize that the old model doesn’t work anymore and has to be restructured”. To ensure this occurs Billy is urging artists and musicians to mobilize together and demand better rates along with an industry wide body to simplify online royalty collections.
VC Danny Rimer from Index Ventures stated that artists are going to have to think of themselves as brands and give their music away for free. Artist would instead make money from endorsements (al la 50 Cents). However most credible artist is not willing to sell their soul to a brand and that is one fact the industry and consumers alike also need to understand. Endorsements and branding ties up are for some artists and not for others. One size does not fit all!
Rounding up the panel Billy Bragg was clear that labels need to clean up their own houses before going after the digital players in terms of payments to artists. I have been stating this for a while now and it is an issue that needs to be examined especially with the new fan funded models arising.
The direct to fans panel was insightful and it has become increasingly clear that these models are here to stay and gaining momentum as each day passes. Ed Arerdieck Director at Real World the CEO’s from both, Slicethepie, Sellaband and the label behind fan funded artists Marillion were on the panel. These models do not necessarily pose a threat to traditional record labels; however they do pose some awkward questions in relation to labels and payment of higher royalty rates and ownership of records to artists.
Yes, these new fan models can be utilized as sources for A&R to source talent. But one does need to ask the question, after receive high royalty rates and total ownership of recordings will artists actually be willing to accept 360 and major label deal terms? My thoughts are that that will not.
Overall, this was a great conference and I will definitely be attending next years. However, I would like to see it run as a full day event as the quality of speakers was great the time was just too short. See you all at EconMusic next year.