Digital music: it’s a huge cash sink
The National History Museum was the setting for the Econ Music Conference, last Tuesday 23rd September. The day’s seminars aimed to tackle the ever-changing economics of digital music.
Topics included Paying versus Privacy, The Future of Mobile Music and to what extent artists and labels can ever find a profitable way out of free downloading and streaming.
The third panel of the day, Social Media: A Profitable Pathway for Artists and Labels? asked if the liscensing regime could ever let the labels prosper, how the web operators are paying their dues and if the artists are getting their fair share of the potential new income streams?
Angel Gambino, social entreprenuer and former Global VP of music and content for Bebo, moderated. To her left sat Billy Bragg; the panel’s sole musician and chief supporter of creative copyright law. David Hyman, CEO of MOG, a social networking music site, was there to lend his expertise. Spencer Hyman, CEO of Last fm, Danny Rimer of Index Ventures fame and Steve Purdham of We7 completed the panel.
Angel Gambino got things started by posing the question:
“What’s more important? Is music more important to the networks? Or, are the networks more important to music?”
As well as presenting opportunities for the consumer, the lack of any barriers or controls in digital creates huge problems for the labels and artists out there. For Billy Bragg,the lack of restrictions and exposure in music “can be fabulous”.
As fabulous as it may be, the lack of barriers in digital brings with it a wealth of monetising and liscensing problems. For Angel, “the magnetic attraction of music brings people together, who are both listening to it and using it as a personal badge.
The fact is that music is a huge cash sink, the panel stressed. It’s not only the artists who are dependent on it as a source of income; the platforms need their content funded and the music needs to be monetised to make it valuable for the labels.
Peer-to-peer file sharing has been going on for decades. In the words of Billy Bragg “it’s only now that technology has devloped from the mix tape to mass downloading and streaming, facilitated by broadband.”
As the expectations of the consumer grows and people want more variety and greater access to free downloading and file sharing, advertising was touted as a viable way to provide revenue.
To show how far behind internet advertising is, compared to television, We 7’s Steve Purdham asked us to think of five great TV ads.
Three quarters of the room put their hands up. When he asked us for our top five online ads, he was greeted by a sea of confused faces and a shout of, “I hate ads!” from someone in the audience.
According to Angel Gambino:
“The advertising really hasn’t caught up to provide revenue for all parties”
If advertising can’t keep up with the demands of the consumers, then what can?
For Danny Rimer of Index Ventures, the future of music should be based around the open source model. In his words:
“music might become the trojan horse for the artist. Artists must think of themselves as brands and market themselves accordingly”
If music becomes the vehicle for a brand rather than the big sell, artists will potentially have to give it away and make their money from other creative services. Billy Bragg’s quip brought the room back down to earth, “It’s hard enough making music. I don’t want to design chinos. I’d hate to see the Guillemots’ jeans”.
He may jest, but recording artists are turning themselves into formidabble branding machines. J Lo was once the un-assuming Jennifer Lopez before she launched a clothing range, perfume and opened a restaurant. Britney’s at it, so is 50 cent, Justin Timberlake and P Diddy.
It may seem like PR overkill, but if the real definition of success is getting to do what you love and making a living from it then the maybe artists will have to become a jack of all trades to ensure their own economic future.
