Newsletter #57 November 2008
CARROTS, STICKS AND TWIGS
It was round two of MusicTank’s series of file sharing debates last week and yet again we saw that, where digital music is concerned at least, take any two people from the music business and you’ll end up with three opinions. Kicking off proceedings and soon to become the focus of much of the evening was Jim Gelcer, CEO and Co-Founder of Harvard start-up Noank Media. Flying in from Toronto, Jim made full use of his air miles with a considered sales pitch for his new service; one he believes could solve many of the music industry’s woes.
For the uninitiated, which appeared to include around 90 per cent of the audience, Noank’s big idea is really quite simple: rather than obsessing over who is downloading tens of thousands of tracks and trying to herd consumers onto shiny new platforms, allow the end user to carry on as they were, using whatever kind of music delivery service they want, over a safe and reliable platform free from viruses and Trojans.
By installing an unobtrusive app on the consumer’s machine, Noank monitor what they actually play, tracking everything from what media files they are really listening to, to the preferred bit-rate and how much of a track they are playing. This information is then used to calculate revenue splits, which are paid back to the rights holders via licences secured by Noank (or not secured, as the case stands at the moment).
On paper it’s a fairly decent proposition. The consumer is able to carry on as they were before and the ISPs avoid the ire of the recordings business, who can not only monetise unlicensed downloads but also harvest vast amounts of data invaluable for plotting everything from tour schedules to marketing budgets. It clearly piqued the interest of Carphone Warehouse’s Andrew Heaney, who saw the potential in the service to both his company and customers and believed it would fit in with his view of an open and unrestricted internet, provided comprehensive licences could be secured with the majors and indies. He certainly preferred what he termed this ‘carrot and twig’ solution, compared to the ‘stick’ approach of disconnecting his customers’ broadband, a route he bluntly stated Carphone Warehouse would not be prepared to go down in any rate.
Perhaps unsurprisingly, the remaining panel members were less enthused about the new service, with 24-7 Entertainment’s Frank Taubert particularly dismissive of the concept of a commercial P2P service, claiming that it had been tried countless times and never delivered a satisfactory user experience (something the 19 out of 20 downloaders who prefer to use unlicensed sites may dispute). For the rest of the panel, legitimising the current P2P free for all was a non-starter. Instead they were looking to refine their own proprietary à la carte and subscription services, with Tom McLennan, Head of Music at Vodafone UK going as far as decrying the alternative to the top down approach as potential “anarchy”.
Still, without the licences in place, Noank would be little more than a nice idea, and despite claiming that rights holders had been very receptive to his service, Jim Gelcer has yet to bring any of the majors on board. They have begun trialling the service in China, with some indies such as Nettwerk signed up, and he believes they are poised to turn that notoriously unprofitable region into a source of revenue that would be measured in billions of dollars. If they do succeed there, then you can be assured there will be a few industry execs paying more attention to this new upstart and we’ll all be hearing a lot more from Noank.
The next in the series takes place on the 18th of November and will consider how to go about licensing compelling alternatives to P2P. Looking at the issues including the popularity of live shows, bootlegs, studio outtakes, mash-ups and other user generated content, we hope to go some way towards settling the debate about collective vs. individual licensing in the digital age.
Editorial by John Power
OUT & ABOUT: MusicTank Events
Please remember all MusicTank events MUST be booked and paid for in advance! Become a member of MusicTank and enjoy privileged discounts on all MusicTank events…
18 Nov – ‘COALITION OF THE BILLING’
MusicTank Asks: “What’s The Way To License Compelling Alternatives To Filesharing?”
SPEAKERS: Keynote – Peter Jenner (Sincere Management). Panel – Jez Bell (Broadcasting & Online Licensing Director, MCPS-PRS Alliance); Tom Frederikse (Solicitor & Attorney, Clintons); Simon Wheeler (Director of Digital, Beggars Group); others tbc
This third session in the “Let’s Sell Recorded Music!“ series sees the focus shift away from technology and new business models to how new distribution services should be licensed. After many a false dawn, record labels are now embracing digital media with a passion and it seems that new digital services are announced every week. The varied nature of many of these services though, some with DRM, some DRM-free, some on an à la carte model, others a subscription service, some ad funded or streamed, others tied to mobile devices, has created just as many new challenges for those whose business it is to license the music. Add to that the popular digital content that has previously gone unlicensed, live shows, bootlegs, studio outtakes, mash-ups and other user generated content, and some argue that licensing practices need to evolve further if we are to embrace the full potential of the digital age.
Some argue for collective licensing – which has proven a solution to technology’s problems since the days of sheet music – others argue against ceding control over what will increasingly become core revenue. And with labels increasingly taking equity in these new platforms how transparent are the deals that are being signed?
02 Dec – ‘SQUARING THE CIRCLE’
SPEAKERS: Simon Persoff (Orange); Will Page (Chief Economist, MCPS-PRS Alliance), others tbc.
Drawing together conclusions from the series and scope possible areas for consultation, research and development. In scoping areas for further development, MusicTank will facilitate consultation, analysis and research required to better inform the conversations that will deliver real innovations and help square the circle.
Booking: Either session may be booked individually at the usual rates (£20 MusicTank Members | £25 Trade Body | £30 Full Price). To book for events individually, please follow the individual links above.
A discount for booking these two remaining sessions is also available, with the following proces and discounts applying…
£35 MusicTank Members – save £5 | £45 Trade Body – save £5 | £55 Full Price – save £5
To get this discount, visit: http://www.musictank.co.uk/events/lets-sell-recorded-music-2-ticket-bundle
Venue: All sessions take place at the MCPS-PRS Alliance, Berners Street, London | Time: 18.30 – 21.00hrs.
“Let’s Sell Recorded Music!” – About the series…
Level: Think Tank – medium-to-high level of knowledge required; open to all.
Illegally downloaded any music recently? Given that nearly two thirds of all internet traffic is made up of P2P activity these days, if you haven’t, then most young people you know are. Since Napster first reared its head in the late nineties, the recorded music business has tried in vain to put the genie back in the bottle. The result – some pr blunders and an estimated 20:1 illegal/legal download rate.
For music fans it’s been a golden age where hard to find and out of print releases have been readily available alongside the latest hits of the day, but with no way of monetising these streams the record labels have been forced to watch their profits dwindle while the world’s been moving online.
The UK government has taken notice and is overseeing a three-pronged initiative aimed at educating and developing awareness, dealing with the most serious infringers and facilitating legitimate offerings.
This Think Tank series focuses on that third prong: effective legitimate alternatives. Over the course of the four events (below), we will review what people want, where technology is heading, what the most plausible new models are and how they might be licensed.
What music consumers actually want and how this tallies with the status quo and raft of new services in various stages of development or launch.
The second in a four-part series, this panel will look at what is becoming technically feasible and what might be the best blue-sky model for the UK, while considering the needs and perspective of ISPs and mobile platforms.
This session considers what might be the best way to license these new services and whether or not a collective approach is indeed desirable or plausible?
Drawing together conclusions from the series and scope possible areas for consultation, research and development.
JOE POX: Christmas TOTP
Christmas is coming, the goose is getting fat, send Top Of The Pops to ITV, and that’ll be the end of that.
Or will it?
Perhaps too busy dealing with the over-the-top public reaction to RossBrandManuelGate, the BBC is not going to give us a Top Of The Pops Christmas special this year. Bah, and indeed, humbug. The BBC pulled the plug on the show back in 2006, but we still had the 25th December which, in these time-shifting, on-demand days, was the only point in the year when you could guarantee that the entire population would be in front on their TVs.
This is the only one-hour window in 365 days and the BBC has scored a massive own goal here by denying us the chance to fight with our parents to bash the Quality Street and watch the hits of the year float past our turkey-fattened eyes and ears. Music on TV is rarer than a dodo’s tooth and the least the BBC could do is indulge us on Christmas day.
Is Simon Cowell (a man who has effectively killed the thrill of the race to the Christmas number 1 with the dead-cert X Factor winner) really the best man to be a custodian for the show (even if he brings it to ITV)? Well, in a word, no. All the show will become is an extra showcase for the X Factor (as if the 15 Saturday nights before Christmas weren’t enough). That just means a bumper stocking for one man and a lump of coal for the rest of us.
INDUSTRY DIARY: Other Music Industry Events
MPA/MMF Management Development Programme 2008
Don’t fret if you missed the first module of this course – all modules are self contained, with the following events still to come:
10 Nov: Module 3 – Income from Overseas: Licensing & Distribution. “When Is A Record Label Not A Record Label?”
This session aims to explore and explain what’s involved with producing and marketing/making available (particularly DIY / independent) releases internationally in 2008 in order that all parties involved may understand the options available, and the decisions to be made.
SPEAKERS: Martin Goldschmidt (MD, Cooking Vinyl); Charles Caldas (CEO, Merlin UK Ltd); Henry Semmence(MD, Absolute Marketing & Distribution)
24 Nov: Module 4 – Show Me The Money: “Alternative Sources Of Funding. The Reality”
This session aims to explore and explain the practical reality of 3rd party finance outside of traditional music industry deals, in order that those attending know and understand how to apply the information to their business and project development ideas.
Time: 6.30pm – 9.30pm
Venue: All modules will be held in the Alliance Boardroom, Copyright House, Berners St, London, W1.
Cost: £75 (incl VAT). Discounts are available for members of MPA, MMF, AIM, APRS, BACS, BPI, IAMA and MPG.
19 Nov: Planning for Recession, Planning for Profit – A FREE Seminar
The MPA in conjunction with Business Link London has developed a seminar to provide advice to businesses on how best to weather the current financial storm. Gain new ideas to get your business in shape and fit enough to withstand the current climate.
Venue: BAFTA 195 Piccadilly, London, W1
Cost: FREE; please visit:
MUSICTANK LOUNGE: New To Site & Event Archive
Have you attended any of the events in the series, “Let’s Sell Recorded Music!”? Do you want to contribute to the ongoing debate? You can post comment and opinion to the discussion forum here: http://www.musictank.co.uk/discussion/event_content_forum/877290003
MusicTank event podcasts and transcripts can be found in both the Podcast section on this site, and on events pages themselves. This premium content is only available to MusicTank Members who pay a small annual fee to subscribe. Membership confers other benefits, too. To join or to read more about our Membership offer:
Recent additions to the archive include:
“HERE WE ARE NOW, ENTERTAIN US” – Podcasts & Transcript
“I can’t think of any other industry that has total certainty and almost complete confidence over both ends of the supply chain. It’s an extraordinary thing. Yes it’s true that the bit in the middle that joins those two ends together is called the music industry – that is going to change and adapt, and that will look very different in five or ten years time…but it’s still going to be there…”
“The digital industry’s troubled birth has been partly due to an expensive and stubborn licensing approach from the majors.”
“…I think there’s a danger in focusing on the volume of music of bundled models, and rather, the industry should be focusing on the quality of the offering. The industry is at risk of losing focus on genuinely good content that people are prepared to pay for…”
“Orange has taken a considerable risk in making this deal [Musique Max]”
“Legal file sharing is the one thing that will save the music business.”
“Paying for acquisition is voluntary. It’s now about adding value to the raw material.”
“WE HAVE THE TECHNOLOGY, WHAT’S THE SOLUTION?” – Transcript
“Of all the ISPs, we [Talk Talk / Carphone Warehouse] are the least interested in supplying content. We have no interest, for example, in TV (which is a total waste of money, given the existence of Sky). We don’t believe we should police filesharing on behalf of rights-holders.”
“We’ve been asked by the government and the BPI to cut off people’s service if they are found to be file sharing. It’s a non-starter as far as we’re concerned. Cutting people’s connection off violates their human rights.”
“There are a number of academic papers around at the moment that extol the virtues of super-distribution of some form. In fact P2P is not the best model, because most broadband connections are asymmetric. A lot of content owners who have experimented with legitimate P2P have moved away from it because it doesn’t offer a good enough customer experience.”
“Packet inspection technology is currently very expensive, and is only used by law enforcement officials . It isn’t worthwhile in a commercial environment.”
“In the future, there may be services which operate like movies where music is released first on one service and then, later, released on others even on MP3, a little while after the DRM version.”
“We will slowly but surely move away from the position where technology got away from the industry into one where the industry and technology start playing a greater role together in monetising the service. If you can’t make money from it, it’s not going to survive.”
New To Site…
MCPS Economic Insight 12: Shadow Pricing P2P’s Economic Impact
On the eve of the deadline for submissions to BERR’s P2P consultation [30.10.08], and more than a decade after file-sharing applications appeared on networks, the supply chain engaging network providers, technology developers and musical copyright owners remains broken, with few signs of self-healing. Here, three authors representing the three disparate camps decided to ‘knock heads together’ to encourage the parties involved to knock heads as well and co-produce a solution that might satisfy all corners.
This report was freely distributed at MusicTank’s ‘We Have The Technology, What’s The Solution’ think tank, 4th Nov, by kind permission of the MCPS-PRS Alliance.
The Register’s Executive Editor, Andrew Orlwoski has meanwhile commented on this paper here:
A New Economics Of P2P File Sharing
MERRY-GO-ROUND: Industry Announcements
London Connected – Register for support.
London Connected is the new skills and business development programme designed to help London’s music businesses and entrepreneurs maximise the opportunities presented by digital technologies.
This programme is managed and delivered by the Association of Independent Music (AIM) supported by £650,000 from the London Development Agency (the LDA).
The London Connected website is now up and running. Go to http://www.londonconnected.org to register and find details of the events, training and services available to you through the London Connected programme.
The opportunities available through London Connected include a free ‘Digital Health Check’ with a digital expert to discuss your digital strategy, ‘Introduction to Digital’ training days, seminars covering different aspects of digital, free MusicAlly subscriptions and employment support in the form of placements and job postings.
The London Connected programme is open to anyone based in the London area (with a valid London postcode) who is working in the music business or looking to work in the music business.
WHEEL OF FORTUNE: Innovation And Enterprise
Ten Tracks (http://www.tentracks.co.uk) was launched on 10 October 2008 as a new model to give a better deal to listeners and musicians. An online-only service, 10 track compilations are available each month as part of ongoing curated ‘channels’, with each bundle of 10 tracks costing just £1.
The reason for the low price was to encourage listeners to take a chance on new music while still paying an amount that would make a difference to artists’ lives. This price is designed to reflect the move towards the growing trend for ‘free’ music, yet is intended to represent good value even in a world where most music can be obtained for ‘free’, because of the quality of the selections. Artists are paid a generous rate – 60% of (Net) sale revenue.
Licensed by the MCPS-PRS, tracks can also be bought individually (30p each), all are DRM-free, and lossless formats are available.
Established acts are already working with Ten Tracks, including The Aliens, Black Affair, and there is an exclusive release from Steve Mason’s other project, King Biscuit Time. Internationally-lauded Glasgow DJs and producers, Optimo, are also curating a channel. There is scope to add new channels, and negotiations are underway with particular labels/individuals about increasing our monthly output.
Ten Tracks is operating in collaboration with The Skinny magazine, Scotland’s most-read music magazine, meaning acts are guaranteed impressive promotion as well as royalties for distribution; in effect a kind of promotional service that pays.
Subscriber numbers are going up by around 10% a day and sit currently at just over 700. At this stage the numbers are fairly low but growing encouragingly, and the press from the Guardian, Radio 1, and various music blogs has all been highly positive.
WISE MONKEY: O2 Reviews & Festivals Conference
A Three Ring Circus On The Thames
From New-Labour white elephant to one of the world’s most successful live entertainment venues it’s been a rollercoaster few years for the building formerly known as The Dome and now burdened with the name of it’s mobile phone sponsor. AEG supremo Philip Anschutz might have been thwarted in his attempt to create the UK’s first super casino, but with the 02 Arena, Indig02 and now Matter all housed beneath it’s canopy, for this venue at least the future’s bright, the future’s or… oh hold on that’s not right.
To get the lowdown on the jewel of South East London, MusicTank’s intrepid reporters spent three very different nights sampling the venue’s varied delights.
The O2 Arena: Stevie Wonder
First up we have the main O2 Arena, all 20,000 seats of it. If you’re going to fill this place up you’ll need to be more than just the current flavour of the month. Certainly not a problem for the star of tonight’s show, a veteran of over 40 years in the business, an artist with 26 Grammy Awards to his name and total album sales of over 150 million units, the man – the legend Stevie Wonder – what’s there to say except the man rules?
Probably the best show we’ve ever been to, covering all the arts. The guy is a pure showman. Now we know why he’s such a star, why the tickets were selling for so much. How many nights did he repeat the same show? How is it possible for someone to sing for so long, let alone with so much energy? Full credit to the band too, one of the funkiest, tightest most accomplished bands we’ve heard for ages.
It’s been a long time since he’s graced these shores but having wowed the crowd with a set that took in tracks for every decade of his career we can only hope that next time he doesn’t leave it so long.
Indig02 : The UK Festival Awards 2008 – 30th October
It was quite fitting that the great and the good of the festival world should gather under what is essentially a glorified tent for their annual boondoggle.
Thankfully though, the Dome, or O2 Arena, as our corporate paymasters have decreed it be called proved to be substantially more sturdy and waterproof than the Eurohike effort that I nearly froze to death in at Bestival this year. Still the absence of rivers of mud did nothing to dampen the spirits and the assembled throng of festival promoters weren’t going to let something like a little comfort, warmth and Ocean Colour Scene acoustic set get in the way of having a good time. Is it even possible to fail to enjoy yourself at an awards ceremony where someone will get to proudly go home with a gong for the best toilets (the Big Chill as it turns out).
The big winner on the night of course was the unlikely champion of rural hip-hop Michael Eavis, who walked away with ‘Festival Moment Of The Year’ (Jay-Z covering Wonderwall), ‘Major Festival Of The Year’ and to cap it off the ‘Outstanding Contribution’ award for his 40 years of service to the cause. Not that all the glory was reserved for the big boys, with several smaller festivals such as Standon Calling, Waveform and the Larmer Tree Gardens, and of course Secret Garden singled out for their efforts.
Sadly though, combine the difficulties many of the smaller and newer festivals experienced this year with the near certainty that by next year we will be locked in the deathly grip of a recession and you can be sure that many of the festivals present at the awards will be in for a tough 2009. Seeing what a friendly and inspiring crowd they were, people who so obviously live and breathe creating memorable events for others to enjoy, you can’t but wish them well and hope that they’ll all make it through to next year’s awards intact. Still with London already receiving its first dusting with snow, you can be sure that up and down the land people are already looking forward to and starting to save for next summer’s field trips, credit crunch or not a sizeable percentage of the population have been bitten by the festival bug and it will take more than a recession to cure them of it.
Matter: This Is Not London – Moshi Moshi’s 10th Birthday, 18th October 08
New superclub Matter is nothing if not ambitious. Built to Fabric’s trademark clean industrial contours, Room 1 had a certain modern grandeur about it – a three storey atrium with gallery and caged walkway for the important people, reminiscent in character to Ministry of Sound’s early style. The sheer size of the space possibly detracted a little from the typical usual atmosphere-soaked appeal of a low ceilinged dance floor, though it’s clearly as much a live venue as a club space, and Room 2 with its smaller clubbier feel made up for this.
On a night when the Jubilee line wasn’t working the only option was boat, and along with a handful of other slightly bemused pre-clubbers we hung around on Waterloo Pier in the surreal surroundings of a dead-of-night South Bank. The Matter web site perhaps needs clarifying a little – we met clubbers who had already gone to two piers that were listed, only to be were then told that nothing would be leaving from there.
Trains and boats considered, we got there pretty late, completely missing Tilly and The Wall and Kate Mash and just catching the end of Florence’s set which, buy all accounts the crowd loved. In room 2 James Yuill was whipping the audience up with electric beats before launching into This Sweet Love, the Prins Thomas mix of which had weirdly just been playing in the other Room 1. He ended the set by breaking No Surprise down into a Matthew Herbert-esque bumpy hoedown before bringing it into sharp focus to sheer delight of the crowd. A great set, sure to have won over some more fans, some of whom who were asking who was on.
Then onto Hot Chip who were brilliant. Shake a Fist, Hold On, Out At The pictures, and obviously Over and Over, made for a really good dance. After wooing the crowd for an age they finished with Ready For The Floor.
We couldn’t stick around for the Drums of Death unfortunately, a shame as the atmosphere was palpably building for them. All told a very good party for a great label. The club itself is surrounded by a sort of barren post-nuclear wasteland, all of which lent itself to the atmosphere in a way. That said on leaving, the combination of flood lights and 10m high fences did bear a fleeting resemblance to what it might be like being let out of prison.
Where Matter earns full marks is the staff, every single one of which – from security staff, bar staff, cloakrooms and clipboard girls – were friendly and professional leading to a really smoothly-run event.
Inaugural UK Festival Conference, 30th October, Gibson Showrooms
The morning session featured two panels looking at ecologically sustainable festivals and green innovations and trends. The single biggest difference to festival emissions was revealed as being audience travel, which accounts for a whopping 65% of CO2 emissions. Speaking later in the day, Andy Copping said that Download Festival was working to encourage car-pooling via incentives such as cheaper camping, closer parking, cheaper food or even free beer!
There were many easy wins onsite to be had as well, such as simply including the requirement, within the Terms and Conditions, for traders to use biodegradable cutlery. In areas such infrastructure, technology was making it possible to save a great deal of electricity, with companies like Seventeen Events and White Label championing the use of LED screens which, because they use a tenth of the energy of tungsten, can light an arena from (apparently) just a single plug socket. More info about all these ideas can be found at www.agreenerfestival.com.
The afternoon sessions were packed, with standing room only, to see the heavyweight promoters and agents discussing the future of festivals and threats to the market. Geoff Ellis underlined the importance of media partnerships to even festivals that regularly sell out (such as T in the Park), as they are crucial for maintaining profile and identity. Rob da Bank, concerned about the use of mobile marketing for fear of spamming people, nevertheless underlined the importance of sponsorship in boosting the artist budget (an area Bestival can rightly be proud of), especially when costs keep rising due to the continual improvement of facilities. Several panelists underlined the real sense of partnership with sponsors and media partners in making the festival as successful as possible.
There was a split in views of artists fees, with Summer Sundae’s Richard Haswell claiming that too many festivals chasing the relatively small number of available headliners is leading to inflationary pressures on artist fees. Citing Dennis Desmond as an example, Primary Talent’s Peter Elliot conversely claimed that concentration of power among the major promoters with interests across multiple events are driving headliners’ prices down.
With the mid-afternoon Mojitos, courtesy of Peppermint Bars, going down very well, it was interesting to hear about Serbia’s EXIT festival, which started life as a 100 day campaign against Milosevich. EXIT’s Bojan Boskovi soon sobered delegates up, however, with news that they are facing their own inflationary pressures as various ‘bullet dodgers’ enter the festival market as a means of laundering criminal money…
All in all an interesting and worthwhile event, roll-on 2009.
That's all for this issue - 'til next time...
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The views and opinions expressed are those of the author and are not necessarily condoned or shared by MusicTank. MusicTank is a non-profit organisation owned and operated by University of Westminster. University of Westminster is a charity and a company limited by guarantee. Reg Number: 977818, England. Registered Office: 309 Regent Street, London, W1. MusicTank is based at University of Westminster, Watford Road, Harrow, Middlesex HA1 3TP
Sections Below:OUT & ABOUT: MusicTank Events
JOE POX: Christmas TOTP
INDUSTRY DIARY: Other Music Industry Events
MUSICTANK LOUNGE: New To Site & Event Archive
MERRY-GO-ROUND: Industry Announcements
WHEEL OF FORTUNE: Innovation And Enterprise
WISE MONKEY: O2 Reviews & Festivals Conference
That's all for this issue - 'til next time...
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