“It was reported recently that EMI has reservations about the reliance of the industry on iTunes as an online music outlet.Record labels are right to be concerned about the lack of digital music stores and the dominance of iTunes in that space. Download sales are still growing in the UK and continuing to deliver a greater rate of return financially, so they’re of growing importance to labels.Just like MTV became synonymous with the music video, iTunes has become the leading name for music downloads and this type of dominance is not healthy for any industry that operates in the digital space.From a consumer perspective, it’s all about choice. People need to have a range of viable options available to them, which in turn develops the best consumer experience possible. Restricting access to one key player in any market can’t be good for consumers or industry.But looking beyond music downloads, there is huge untapped potential for the online platform to deliver still more for labels and artists.The music industry has endured a protracted battle in the digital landscape, during which time it’s seen the value of its product dwindle. Music, legitimately or not, has become an almost freely available commodity online; the challenge now for labels is how to monetise their digital content when consumers have become so used to getting their music for free.Clearly, iTunes and other online music shops play a vital role in digital music delivering a return for record labels. However, labels have become increasingly smart at recognising the alternative revenue streams available beyond conventional download sales and are fully integrating the digital music platform into traditional promotional methods.In order to be truly successful, a digital music site needs to be mutually beneficial for the industry and consumers. It must deliver engaging content and value for money for the music fan, and be commercially viable for both the digital platform and the label.Audio streaming services work for the consumer in that they get their music for free in return for a small amount of advertising. But sites need to be built on a business model that ensures they can generate revenue while still delivering an engaging experience.Artists such as Radiohead have demonstrated new thinking in the digital landscape with a ‘pay-what-you-want’ album release. While this is all well and good for artists with a ready made fan base of millions, it is more difficult to employ with up and coming artists.Digital music sites must therefore work hand in hand with the industry to support artists equally, and the revenue-share model being pioneered by certain music platforms is evidence of this in action.Beyond audio streaming and download sales, online video is a third area that has the potential to boost an artists’ profile and also deliver a return on investment. Social media and viral marketing have seen the return of the music video as an important promotional tool in recent years, which no doubt artists such as OK Go! will testify to. More recently Cee-Lo of Gnarls Barkley fame saw his video ‘F**k You’ become an instant viral hit online prior to the release of his latest album.In the same way that MTV re-invented the music video for a new generation of fans and made it a viable marketing tool, online video sites now provide this platform but with added interaction and innovation. Moving forward, this is surely an area digital music platforms and labels can work together to develop.Online video also has the potential to boost an artist’s profile and build a strong ‘brand’ personality. As video sites offer far more by way of engagement than download sites, they can help create a huge online fan base for an artist, which in turn can deliver a monetary return through record purchases or tickets for concerts further down the line. New innovations such as direct-to-fan live webcam chats and streaming of performances can also bring the artist into the home of the potential fan.Perhaps more importantly, however, there is also the potential for online video to deliver an instant and tangible financial return owing to more profitable advertising models and media partnerships. CPM rates are far higher for video advertising as opposed to audio and as a result, it ticks the three boxes of being an attractive proposition for artist, platform and consumer – which is a strong foundation from which to build.The debate on making online music pay will no doubt continue, and there is clearly no easy answer. Be it through online video, or the development of profitable audio streaming offerings, digital offers a whole host of benefits outside of download sales that can offer immediate financial results.”Mark French is co-founder of MUZU TV, the free music video site.
Tools: platforms to help you reach new audiences
Tools: Kaiber
In the year or so since its launch, AI startup Kaiber has been making waves,…