Last night saw a debate with the very grand title of Technology, Streaming & The Future Of The Music Industry at Portcullis House in London, the spillover offices from the Houses of Parliament.
It wasn’t a typical music industry conference: less of a conversational debate and more a set of speakers presenting views one after another.
Lord Tim Clement-Jones, sponsor of the Live Music Bill, opened by talking about the challenges of “licensing in an analogue way for a digital world” but was contradicted by Suzie Winter from the Alliance Against IP Theft.
Her take: licensing isn’t holding back innovation and new digital music services, citing the presence of more than 60 licensed services as proof that deals were getting done. More on that later.
Oleg Fomenko from the event’s sponsor, Bloom.fm, outlined his company’s business model and stressed the need for more pricing tiers, including his desire for Bloom.fm to be seen as more than just a “one-quid music service”.
He pointed to ISPs and mobile operators as examples of businesses who can successfully present tiered offerings and price plans to their users, while adding that it took more than two years for his company to get its deals – although note, it’s still trying to secure a licence from Warner Music Group.
Simon Morrison, public policy manager for Google, talked up the legal offerings his company had brought to the table but also addressed the issue of copyright infringement that’s regularly used as a stick with which to beat Google. “Copyright infringement remains an issue,” he said. “But evidence is showing that more legitimate access reduces the amount of infringement.”
He talked of the most pirated films online being those that are not available (yet) on legal services and referenced Spotify research in Sweden and the Netherlands showing a similar trend in music. He added Google has “invested a tremendous amount” in copyright protection, citing ContentID on YouTube and Google’s processing of 4m takedown requests a week.
“IP policy is not winner takes all,” he warned. “Flexibility in a well-drawn copyright regime can enable innovation which will create benefits for the rightsholder community.” He went on to conclude: “We too would like to future-proof copyright law. There is a balance here in how to draw the law that would benefit the tech and creative sectors.”
The discussion really took off when Tim Clark from ie:music, who manages artists including Robbie Williams and Passenger among others) and Mark Kelly of Marillion and the Featured Artists Coalition (FAC) gave their views.
Kelly referenced back to the stat about 60+ legal services, but added, “It’s mostly about Spotify, isn’t it?” He praised Spotify for its recent publication of its streaming rates and said this transparency will enable artists to see where the money is going. But labels, he felt, have a lot more to do here. “There has to be more transparency,” he said. “We have got to get rid of this NDA culture that we have got.”
Kelly was recently elected to the board of PPL, but added that if he was also on the board of PRS he would know the deal terms between publishers and Google. “I am just an artist who gets paid by PRS but I have no way of knowing how that money gets [apportioned],” he said. “That’s wrong.”
He added that most artists are powerless in trying to clear the obfuscation that surrounds digital payments. “They don’t have the money to threaten to take labels to court,” he noted, before suggesting that this is what it will take to clear things up.
Clark opened by being extremely candid about huge parts of his business and his artists’ income. “I represent Robbie Williams but also a number of smaller acts,” he said. “But I have got to tell you it is damned difficult. It is difficult enough for Robbie Williams whose revenues from recorded music have plummeted. His revenues are nothing like what they were five or six years ago.”
He said the focus needs to be on the artist and the consumer. “If we can have those two really happy then we have got a great business,” he said. “But at the moment we have all sorts of people fighting their corners. We have the old business of recorded music still clinging on to its analogue business and it hasn’t been very good at embracing digital.”
Clark also suggested the ’60+ licensed services’ stat is misleading: “Most of them are moribund.” He added that overall recorded music revenues are “going down incredibly quickly”, and predicted that it will take a long time for digital revenues to make up for the decline in physical.
Clark was particularly scathing about the time demands that digital is now placing on artists. “The thing about digital is that it is so damn onerous. The amount of content that artists have to make now is crazy. They are tweeting, they are making stuff for Facebook, they are making stuff for YouTube. For most of it, they get no return on it at all, other than a vague, ‘Oh well, it’s making me better known’,” he said.
“It is unbelievable how much stuff is made. When I came into the industry in the 1960s, crikey, you put out a single in a paper bag. It’s nothing like that today. It is unbelievable how much stuff artists have to do in order to try and get people come and buy their tickets or their merchandise – all these things they have to do to make a living. Because, believe you me, they ain’t making a living out of recorded music. That’s a fact.”
He added that “deals have to change to reflect the reality” of the new market, declaring that 50/50 splits between labels and artists for digital revenues should be “a minimum” as the cost of distribution is “minimal”. To illustrate this point, he gave the example of Passenger whose last two albums were distributed by TuneCore and said “the cost of us distributing those albums was 0.18% of his revenue” from their sale. “If TuneCore can do it, why can’t record companies?”
Clark described digital distribution as “cheap as chips” and compared it to the old business where there were stock issues and returns. “We can actually offer consumers cheaper music if we take some of the gloop out of the middle,” he said. “We [the industry] are all gloop in the middle and, as gloop, we have to justify our roles. I have to justify what I do to Robbie Williams or Passenger every day of my life. If I am not performing, I will get the boot.”
He ended by calling for a renewed emphasis to make the consumer experience better. “Because right now,” he said, “it’s pretty poor.”