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Music biz agrees: stop shooting self in foot

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At the Norwegian summer resort of Kristiansand in Norway last week, representatives of all corners of the British (and global) music business came together to think the unthinkable.

That's unusual in itself. What's generally called the "music industry" consists of violently opposed parties: small labels against big labels; publishers against recording rights owners; managers against everyone else. Much time is spent screwing or suing one another. The past sure is tense.

Perhaps for the first time, the entire range of representatives - including the biggest and most powerful recording interests - looked into the abyss, and agreed that what they what they need to do is very different to what they've been doing for the past 15 years - ever since since the sudden growth of public computer networks represented by today's free-for-all internet.

The event was convened by music manager Peter Jenner. Today Jenner represents Billy Bragg, but his 40-year career in the industry began as Pink Floyd's first manager (representing Syd after the split), and launching the Harvest label. Today, Jenner is secretary general of the International Music Manager's Forum, the IMMF. Jenner has been using his contacts book and influence to cajole the industry into radical change: a process which began with his "Beyond the Soundbytes" report and conference last year. Reporting restrictions, under the Chatham House rule, applied to all participants - so forgive your reporter for the generalities.

Out of Crisis

It's the dramatic fall in CD revenues - we don't have the official Q2 figures just yet, but they're said to be down 40 per cent year-on-year in some markets - that appears to have precipitated the change in thinking.

No Declaration or Manifesto was issued at Kristiansand. The event didn't even have a formal name. But a consensus looked forward to a post-physical media future, where music can flow more freely, and where creators can finally be rewarded from the wires and pipes over which music flows "anarchistically" today. While few readers will mourn the demise of the big, vertically integrated record label, the awkward fact remains that millions enjoy music today while cutting the creators out of the equation. The internet has concentrated power in the hands of a few owners in the telecoms and publishing industries - leaving originators with little option but to hope for fame, and beg for scraps.

At Kristiansand, attendees heard how the world may look pretty different, given concerted action. VC money or private equity could be the driver for the next waves of investment - where areas of expertise such as A&R, marketing and artists management are much looser than they are today.

We also heard concerns how business models will be able to sustain artist growth. Given that private equity or VC money is typically rapacious and shortsighted, the artists at the top of the tree looks set to prosper. Money follows the largest returns. Amateurs have never had it so good, with cheap production and marketing tools and new direct electronic distribution channels. But what about the pro performers who aren't ever going to be Madonna, and still want to sustain a career? It's a question without a clear answer so far.

What consensus did emerge broadly favoured the following:

  • Prosecuting end users is silly - when you can monetise them
  • Since "piracy" today means "get free music", the future has to offer something that "feels like free"
  • Vastly wealthier industries than the music business today profit from the demand for recorded music - without giving anything back. That isn't fair, and it's got to change
  • Digital music services of the future need a better deal than the begrudging and piecemeal licenses offered so far by rights holders: but these have to be so attractive only the suicidal would want to turn it down.

What now?

"The era of levies is over," said one participant. "Government isn't going to step in and hand us a business."

History shows us almost every new technology affecting copyright owners is considered illegal to begin with, but eventually they all fall under an arrangement that addresses the needs of consumers and creators. This is a difficult balancing act: if the license proposition is unattractive, then either the technology is shunned, or it continues underground. Digital networks are far from the first "intangible" technology rights holders have encountered, but it has been one of the longest journeys to reach a state of agreement.

AT&T's recent decision to police its network for copyright violations using deep packet inspection suggests that network operators are dropping their objections to "common carrier" status. Of course, they'd much rather not be in the policing business, which is expensive and gains them no direct income: they would prefer to offer added value services you and I willingly want to pay for. But for that, they need the co-operation of the music industry.

Bendik Hofseth, the Norwegian composer musician who's on the board of the Norwegian Performing Rights Society TONO, and chairman of the Norwegian composer's association, played host at Kristiansand. He heads a new center to study emerging rights models and music business models at Kristensand's 15,000-student Agder University College. The research center promises to be a refreshing and long overdue European counterpart to the "cyberlaw" departments that have proved so lucrative for American academic business, but whose esoteric and abstract approach, rooted in US constitutional law, seems increasingly at odds with direction the rest of the world is taking.

Perhaps Kristiansand may be remembered as the place where sanity broke out. ®

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