WASHINGTON, D.C. – The music industry is trying to survive and possibly reinvent itself. Artists want to get paid. And consumers want music quickly with no strings attached. Are all three goals achievable, and if not, who will lose out? Can unfettered access to the Internet co-exist with artist's desires to get paid for their music? Can the music industry hack its way through a maze of legal obligations and create a new business model that entices fans before all those fans disappear into the digital underground, where music runs wild and free?
These questions dominated the Future of Music Policy Summit in the nation’s capital, an annual gathering of some of the industry’s leading thinkers and innovators, alongside representatives of the music, technology, business and government communities.
The conference, which concluded Tuesday,
addressed the biggest question in music today: how to create a legitimate
digital marketplace for music. How that question is resolved will determine how
music is distributed and by whom, how fans will hear that music and at what
price, and how artists will get paid -- if at all.
The summit’s driving force is the Future of Music Coalition, a nonprofit education, research and advocacy group for musicians. The coalition has been a consistently progressive and forward-looking voice during a difficult decade for the music industry, when sales of recorded music plummeted even as more listeners gained access to more music than ever through countless digital platforms, many of them unsanctioned.
At the top of the summit agenda was net neutrality, the principle that keeps the Internet equally accessible to all users. A few major corporations have advocated tiered access to the Internet based on the ability to pay, a notion strongly rejected in keynote speeches by Sen. Al Franken (D-Minn.) and Federal Communications Chairman Julius Genachowski, who will oversee the rulemaking process on net neutrality getting underway in the next few weeks. But Franken and Genachowski also said that any Internet activity that violates artist copyright could not be tolerated.
“Enforcement of copyright and laws of network openness can and must co-exist.” Genachowski said, but how file-trading could be monitored for illegal activity while unimpeded Internet access is maintained remains to be seen. Several European governments have already approved or are considering regulations that would restrict or deny Internet access to users deemed to be swapping copyrighted files. President Obama recently appointed an overseer of copyright, Victoria Espinel, but she’s expected to steer a moderate course on Internet usage. After a decade of punitive but largely ineffective measures against file-sharers, many industry veterans are calling for business models that embrace the historic tide of music listening facilitated by the Internet.
“Copying can’t be stopped,” said artist manager Peter Jenner. “I have an interest in getting paid, but we have to stop thinking of the Internet like a shop and more like a radio station.” The industry is clinging to a business built on mass-produced “small bits of plastic” sold inside physical stores. “The less we think about how we did it in the past, the faster we’ll figure out how to make money,” he said.
The Future of Music Coalition argues that strong guidelines that favor net neutrality will make Internet access less costly and more widely available to more people, and serve to drive consumers to legitimate digital music stores that will put more money in the pocket of artists. But first there must be stores that offer more attractive products than free peer-to-peer networks. As U.K. singer-songwriter Billy Bragg wrote in a recent editorial, “…we will not be able to marginalize the pirates until we can offer accessible, easy to use, fairly priced alternative business models that people will actually want to buy their music from.”
One such service could be Spotify, which debuted in Europe last year. Daniel Ek, the Swedish founder of Spotify, has created a music platform that is fast, easy to use and more versatile than traditional music stores. It offers consumers a variety of options in accessing, paying for and sharing music, and shares revenue with artists from a pool of revenue created by downloads, advertising and subscriptions.
But Ek said the service’s U.S. debut is still a few months off as it works through a maze of licensing issues with publishers, labels and collection agencies. To create a new above-board music platform in America under current copyright law requires big reserves of money, lawyers and perseverance.
“The Internet is a simple distribution platform … [but] we’ve made things unnecessarily complex,” said Johanna Shelton, senior policy counsel of Google Inc. Calls for a music rights organization, a one-stop shop to deal with all licensing issues, have gone unheeded. Meanwhile, artists who have moved outside traditional record deals are forging alliances that allow them to be more agile in responding to consumer behavior.
Radiohead, which released its latest album, “In Rainbows,” through its Web site and ended up selling more than 3 million copies, has been leading the way. Since then, the British quintet has released a steady stream of digital music, some of it for free, and engaged fans to participate in making videos. Brian Message, a member of the band’s management team, said, “There’s a globe out there to be reached. It’s not about protecting the copyright-trading game. Sometimes it can be good to give away music.”
He sees a more fluid, flexible relationship involving bands, fans and investors, “merged together with no rules.” Somewhere between the flexibility of the world’s Radioheads and the rigidness of 20th Century rights holder, lies the path to a new business model.
greg@gregkot.com