Rethinking Music in the Digital Age
“It’s still a star business.” For Jon Platt, EMI North America, it all starts with the music and with artist development. The challenge is where to find the time and money to grow talent in an industry climate that favors disposable stars and demands instant results.
At last week’s “Rethink Music” conference in Boston, artists, academics, policy makers, and businessmen gathered to discuss the challenges facing the industry and to consider how music will be funded and distributed in the digital age. The focus was on creativity and technology, and how innovations simultaneously make it easier, yet at the same time more difficult for songwriters and performers to ply their craft. While technology has made music readily accessible at the desktop and on the go, the creators of that music may not realize a profit from their work. Illegal downloads and widespread sharing of digital media are difficult to intercept and unlikely to change. As Platt explained, “It’s hard to educate a generation that is used to getting water out of the faucet for free.”
Most in attendance agreed that the music industry needs a new financial model, and one that is “not predicated on the sales of prerecorded music”. Joe Kennedy, President and CEO of Pandora, insisted that the key to success is to create a wonderful experience for the consumer. That experience should offer quality, convenience, and the capacity for new music discovery. The music industry needs to provide consumers a product they’ll want to buy.
Kennedy predicted exciting times ahead. Currently half of music purchases are digital downloads. The growth in smart phone and tablet technology has contributed to an increased volume of digital purchases, and as prices for those phones come down, music will go increasingly mobile.
It may be good news that only15-20% of the internet population purchases music, and that fraction of users is responsible for half of all music sales. There is a large, untapped market that could be mobilized if music purchases could be made simpler and more attractive. The next major advance in music distribution is expected to come through cloud technology.
Just as we all get email through the cloud, music will soon be available without downloading. Both ad supported (Pandora), and subscription based (MOG) services will soon make music available on demand through home theaters and in the car, and available to share through social media including Facebook. Artist and songwriter payments will be based not on individual downloads, but on frequency of play.
As music goes social, the relationship between artist and fan has become increasingly important. While consumers may be reluctant to pay for recorded music, they have been surprisingly open to providing direct support to musicians, cutting out the middleman.
Boston based artist Bleu described his success using the online funding platform “Kickstarter”. Without the means to publicize his new album, Bleu turned to his fans, asking for online contributions to fund promotion. In return, fans were offered rewards ranging from a signed cd to the opportunity to write a song with the artist, based on contribution level. The goal was $8K in 45 days. Instead, Bleu raised $40k. Whereas fans often balk at a $0.99 digital download, the average fan contribution direct to the artist was $100 for this project. Fans wanted to be directly involved with the artist and his work.
As the music industry evolves, the artist has become a small businessman. Through an emerging direct band to fan connection, the artist can slowly build his/her business over time. New software applications will allow better analytics to answer questions about demographics, allowing musicians to better understand their current and potential fanbase.
The future of music is exciting, but challenging, as artists and industry professionals alike seek to provide a high quality product in a form that consumers will buy. For the musician, the challenge to both create and market can seem overwhelming. As one artist advised “Just be the best you that you can be.”