Can't the independent sector go it alone with some kind of licensing deal, with the PlayLouder MSP model of legal P2P?
We already have something like that with eMusic. We find our relationship with them positive and productive, and we like it. Obviously we make less per unit, but we make more per consumer – and that's a trade-off you can live on. They're in a position where people go to them for a restricted musical offering, and they still succeed. And for me that's an encouraging example.
But we're 20 per cent of the market and we can't ignore what the market leaders are doing, and what Universal is doing ultimately determines what the market is. There's no point in denying it.
One of the reasons why at IMPALA we've been so exercised by Universal's dominance is that the market is in the control of one or two parties, and we don't think that's healthy. If the regulators regulated it as we think they should, then it could be avoided for the good of the consumer.
If I had to pick put one dominant theme from Register emails and comments, and it's not representative of everyone I'm sure, is that the value of sound recordings is going down, and the owners should give them away for nothing – and perform or sell T-shirts. Are you optimistic about being able to maintain that value?
I wouldn't say optimistic, but we're certainly working hard towards it. It's very difficult because everybody in the market is driving down the value. We're not just talking about file-sharing and CD burning, but I'm also talking about deals labels are doing with supermarkets and Sunday newspapers. All of which you can understand, but all of which makes it difficult to maintain value.
I think what we have to do is far more flexible about price. The industry has been very bizarre over the years – it's essentially a one price industry. We're looking at releasing some music more cheaply, some music more expensively, but just finding a price that fits the project. Creating special deluxe editions or reducing the cost on others, and selling them more cheaply.
John Kennedy [IFPI chief executive] says he thinks he's 80 per cent of the way there to licensing digital consumption through the network, and there's opportunity there. But he doesn't want to give everybody access to everything at once. Going that last 20 per cent [to a collective license] would destroy physical, he thinks. Do you agree?
Well, I don't want to destroy physical sales either. We find physical and digital are both viable markets that people enjoy using. But clearly, there's an opportunity for music on tap, and as a service, and it's something we should explore. I think we all want to see it come, but we don't want to see it destroy even the new versions of how people enjoy music.
All the talk now is about going after the network operators. But I can't see the carrot for the networks - only a stick. What is it?
The carrot has to be how they can participate in the value chain of music. Unfortunately it's always very difficult going from something that's free to an industry to something that has a cost to the industry. That's not going to be easy.
Technology evangelists for the companies that use copyright material, are very subtle in their rhetoric; much of the "Web 2.0" evangelism is that people should work for free, or very little, for the good of the internet.
OK if you follow that logic, if musicians aren't going to get paid, then they have to work for nothing; and obviously no one can't live on nothing; so the music has to be funded in some other way. The only way I can think of is some kind of sponsorship and branding, which would be an updating of the Florentine patronage model. But if you do that, then you put artists in the position where they're financially dependent on patrons, and whereas that may have worked 400 years ago, it isn't desirable now.
...So all these Reg readers who think recordings should be given away free, and foam and fulminate when the RIAA throws its lawyers around, will presumably be fully in support in future when they set the attack dogs on unlicenced t-shirt sales?
Exception or example?
There is a band - Show of Hands - who have been around for many years on the Folk/Rock circuit. Pretty big - played the Albert Hall a couple of times, regularly win awards, easily fill provincial venues like The Lowry, and as far as I can see make their living entirely from playing their music and selling CD's.
When I have seen them play live they have always made a point of telling people to go out there, copy their CD's, give them to your friends, tell them to copy them etc. Last time I saw them they told a story about how a chap came from Germany just to see them just because he'd heard a copy CD and explained that this demonstrated how they wanted their music to reach people. They have always worked on the basis that CD copying spreads the message of their music - the more copies, the more potential concert goers.
At concerts, people queue for the original CD's the same as anywhere. The only conclusion is that if the music is any good, and listeners respect the effort that is made to produce it, they will pay to own a part of it. Music is more than the sound, it is part of life. Owning an original CD is like keeping family photos; every so often, you dig out the old stuff, do a bit of reminiscing, remember the good times.
The record companies have to find a means of adding value to physical sales. Perhaps artwork, discount vouchers for concerts, access to limited edition clothing. Whatever. The only certainty is the present model will never work.
Also, regional copyright deals are nuts. I have ordered CD's from the USA of bands I have heard on Pandora/Radioparadise etc. Many American bands are losing potential sales with the restriction on world wide airplay caused by the stupid regional restrictions that are now being put in place on some net radio. The World is crazy.
They had their chance in 1997 and blew it - or snorted it.
In 1997 I put a complete digital download and ordering system with copyright protection to the record companies. The consumer would get a cheaper product. The record companies were offered more money than they were getting and the artists were to be paid more and be paid the instant their product was paid for by the purchaser.. Every CD had full-screen hi-fi videos and fan stuff.along with weblinks back to the band's site and digital downloads of tracks or custom CD's delivered to your door in 24 hours.
Dreamworks jumped in 1st with a Henry Rollins album and were very keen.
Universal was very enthusiastic.
BMG wanted me to do it just for them and no-one else.
Sony thought they could do it themselves.
I produced product for all of them - most of them just did it to try to reverse engineer what I'd done - even Intel couldn't get usable video bigger that a matchbox off a CD on a 486 back then.
In the end I realised it just wouldn't work unless Sony came on board.
Tony M it is all your fault. Sony was the worst.
I told them they would lose billions. They did and still are.
In the end I truly believe it was because the record companies didn't want the artists actually getting their royalties - there was a lot of funny stuff going on back then - like costs being inflated by everyone in the chain so that your album art cost $x and an ounce of cocaine for the record co executive.
The rest is history...
If the record companies want a second chance at the pie I've got something even better up my sleeve - for everyone - consumers, artists and the record labels.
Don't miss the bus on this one - it'll knock all the pirates, Apples, Telco's and everyone else with their snout in the trough for a six.