Posted by John-Paul Greenock: Who can we rely upon in the Music Industry to get us out of this mess?

Who can we rely upon in the Music Industry?

Posted by John-Paul Greenock

There are many within the Music & Entertainment industry, far more knowledgeable than myself, who mightsay that the record industry has been screwed over by the tech industry (and the public) just as the record industry have screwed over the artist industry(and the public)……for years. And that debate my friends is way beyond my paygrade. I did reply in slight haste on TMV recently on a similar line to a postfrom one of my colleagues, but a rant on a soap box is sometimes just a rant.
This is version 2, with brain and heart working in harmony. It is a somewhat
emotive subject in an industry full of passion, drive…..and money.

What we can deduce, is with years of what could be seen as ‘bumbling around’ with no clear digital strategythat has worked to any great degree (negatively affecting physical revenues
whilst failing to maximise digital business models) we can no longer cry over
spilt milk. We now know with hindsight the industry messed up, end of story.
However, why the major labels and industry bodies have had so many issues is a
fair question for rational debate. Has it been due to a lack of personnel
strategically advising them (or with any success)? Do we not have the likes of
Harvard, Yale, Caltech, Stanford, or Oxbridge for a reason? Effective ‘joined
up’ policy is what we need, but do we have the correct executives in place to
make these long term strategic choices?

Now it is time for us all to work intelligently with new business models and our customers, but also
importantly to protect our artists, and protect the development of new music that will thrive and not simply just die after a single album, as is so often the case now. Hey, even the global superstar Beyonce is having trouble maintaining market share at present, even with a multi-million dollar worldwide marketing campaign. Is this maybe down to a lack of true artist authenticity
where the likes of Adele and Susan Boyle (and Amy Winehouse, rest her soul) continue
to do great business? We also attribute the successes of the ‘heritage acts’
that have stood the test of time to great back catalogue, a loyal fan base and
superb live shows. Take That and U2 are prime examples, but how many acts these
days can sell stadiums with such loyal fans? Where are the next Rolling Stones,
Queen, or Coldplay?

Therefore bringing together and developing the most effective mix of creatives, management, and
technologists, to give the public what they want is the key…..convenience of good quality product at the right price point, which is as it’s always been. I stress quality product delivered conveniently, and they will pay. This equates to both recorded and live sectors but it has to be a long term strategy (not
short term ‘maximisation’ of revenue as we are seeing in the concert industry
via secondary ticketing for example).

Apple in many ways gives the public exactly that via a delivery system of great technology and seamless marketing, but do they really care about the music/entertainment industry
beyond selling cool hardware? They do not create content, and they surely have
been given, as has been illustrated by the less than favourable deals they have
made with the industry, far too much power in a very short space of time. This
has ultimately led to a lack of competition, which is historically almost
always a false economy.

The creators of content and content providers surely have to take back control, as when you control the content you control the pipe, and you control distribution. Control distribution by making it convenient using cool technology, which works in a superior and effective user friendly model…and you’re a winner. Maybe if therecord industry had hired Shawn Fanning instead of demonising him we might have had a user-friendly controllable industry portal run by Napster or iTunes
(possibly negating much of the piracy) and paid them a small royalty. Would our
industry be in a better place in 2011?

We cannot (in my humble opinion) let technology companies have so much control over something so
precious to our daily lives. We have already seen over the last ten years a massive reduction of investment in artist development, down to a direct effect of the fall in revenues year-on-year. ISP’s and mobile companies have in the same period made vast profits out of content (whether legal or illegal) and it has taken a great deal of wasted time to get anywhere near a Spotify-type model
that the industry will work with, and that the end customer enjoys, benefits
from using…and will pay for.

However looking at the example of Spotify, even this has been a challenge as far as mobile companies are concerned, who make vast profits on data transfer. Why is Spotify not free
to stream for use on mobiles? Is this because mobile companies want to make as
much money out of consumers as they can on data? Do we really think a free
Spotify service within a tariff costs so much more? Isn’t this the same type of
story as the telco giant BT told about call charges when we all knew internet
technology was making call charges almost negligible, though they kept charging
the customer through the nose for years?

So let’s get to the bottom of these pricing structures and cost bases once and for all (and that includes
all technology companies). In the example above, I expect that an ‘all you can eat’ data/calls package from mobile providers is not as expensive as we’re made to think, and could be seen to give them a commercial excuse to limit what we can and can’t access. Follow the money and you always seem to get to the answer.

In my view (for what it’s worth), if we are finally to get the music industry out of the mess we have
created:

1. Let’s control who we give content to. Do not give it away because you don’t know what you are doing, or you are scared of missing the boat, and have not even done a simple college SWOT
analysis.

2. Control the pipes. Do not let ISP’s and mobile companies make free money out of free content whilst our industry suffers. They need to control what is going on, possibly by charging a one-off
tariff or levy which will go directly back to the rights holders to be split
accordingly. What are your ideas on this?

3. Let us not criminalise the public, but instead work with them to recoup lost revenues from the pipe owners, the advertisers, and end customers through digital levies. They will have no
choice, just like utility bills (reference David Bowie, 2002).

4. Work with the technologists who have the great products and those who love the music/entertainment industry and not just those out to sell hardware at any cost.

5. Give the public convenience and great product at the right price point and that will make the big bucks over the long term, as it always does. We work in an industry full of passion and
risk is inevitable. How else would we have such a legacy of great artists, and
talented executives who have built those artists’ careers, as well as their
own?

6. Record & Entertainment Execs: Please don’t JUST focus on the next quarter just so you can make your bonuses. Invest in and develop those great artists that will create the next soundtrack to our
lives. Remember if you can, of the music business with big ‘M’ and small ‘b’.

7. Milking your public over a short term can at times come back round to bite you in the ass. Trust in the qualityof product, work with the customer, and control the method of content delivery.

Let’s look forward to a great future for all……………….