music, media, and money

Before this week’s announcement that Microsoft will have to pay Alcatel Lucent $1.5 billion for MP3 patent infringements, (Microsoft thought they already had a licence), The FT was already reporting how the music business is changing – it’s in such a huge state of flux that “As the head of one of the largest record labels observes: “My job used to be getting hits and signing great artists. Now we’e in a battle trying to figure out how to stay in business.”

Which reminded me of a post in my old Radio blog, Music Morphs, from 2004:
“New Spin on the Music Business. A Harvard professor outlines a radical plan for compensating recording artists in the digital age. He wants to pay for music with taxes on Internet access and MP3 players. [Wired News]

“It’s a problem than needs cracking – and it’ll go one of two ways… 1) universal acceptance of an additional cost or 2) nowhere, sadly.

“But if the piper doesn’t get paid, the music can’t be free (pipers need to eat)… so we’ll end up with 3) encription & charges for music.”

Since then, two new things have happened:

1) The emergence of new music channels like Last FM(player at the foot of this page 😉 secondlife, and myspace, which suggest that artists can distribute & promote their music without the support of a major music label.

and

2) European governments are starting to ban propriatary music standards, because they’re anti-competitive. (Scandinavia, France ). DRM software seems to be eminently hackable anyway, so far. (BluRay and Apple hack stories plucked from Google news) so how much use is a digital rights management strategy anyway – the more successful it was, the more it becomes a target for hackers.

All of which might lead you to think that this is another example of ‘community-led marketing wins out’. I’m not so sure.

Is this the endgame: artists use community & social networks to give their material a first airing. It’s also a fertile hunting   A&R folk, who can do what they’ve always done. Spot new marketable talent, and lift them to a level they could never reach on their own. The music business should be looking at how to reduce distribution, sales & marketing costs through digital channels, and charging for their branded equity: content, promotional materials, and live music.

Leave a comment