MIDEM(Net) Blog

Keith Jopling: 2010 might be time for the industry to face the music and dance

In this guest post, Keith Jopling, consultant and former director of strategic analysis and research for the IFPI, shares his views on "what it will take for the industry to achieve real breakthrough in 2010."

2009 has been a big year in music industry developments. I don’t want to re-cap here what you already know, but 2009 was the year in which iTunes finally found itself with a formidable challenger brand that wasn’t P2P. As Spotify goes from strength-to-strength, I hope that 2010 sees that service face down the cynicism about its commercial prospects and demonstrate to all that by giving consumers what they want, success will follow, and bring a win-win for both consumers and the industry.

I also applaud governments actively taking a stand. Though in the UK the Mandelson-led policy is somewhat muddled has a fair way to go to be helpful, it is at least, and at last, a policy. Services wise I also really like the look of MOG’s all-access service and the newly beta-launched M-flo. Both, like Spotify before them, seem to be offering something different and making their positioning clear. I’ve yet to see any puns about how many lives MOG can have following that other feline industry survivor Napster.

I wonder if the second-generation subscription brands will survive another year though. I also have less hope for ISP-based solutions, from what we’ve seen so far. Like Nokia’s Comes With Music, I see signs of too much compromise and not enough clarity and strength in the propositions to add value to music fans - yet.

Breaking Through The Noise

ATTENTION ALL ARTISTS, THE WORLD NOW BELONGS TO YOU!

The Internet was supposed to be the ultimate leveler, great music would be able to find its audience, the 'big label' gatekeepers would no longer control access to the masses. It hasn't exactly played out that way. According to my friend, Tommy Silverman/Tommy Boy Records and the co-founder of the New Music Seminar recently told me that he did the math and only 228 artists broke 10,000 units for the first time last year out of 105,000 albums. That’s 2.17% but only 15 of those did it without the help of a real label. That's not very encouraging to the other ninety-eight percent.

While tens of thousand of artists are self-releasing their music, their ability to get noticed in a meaningful way is stifled by the sheer volume of music that is arriving daily at iTunes, Amazon, Spotify, MySpace Music, Yahoo, Rhapsody, Pandora, iHeart and others. Ten years ago, there were roughly twenty-five thousand album releases a year. In 2009, it is estimated that there will be over one hundred thousand albums put into digital distribution. That's roughly a million new tracks a year, four million minutes of music, or almost three thousand days-worth of song. But, maybe, if I listen really, really fast, I could....nope!

Bruce Houghton: Looking Back At My Predictions For 2009. What Lies Ahead?

At about this time last year I posted "3 Trends, 13 Companies & 1 Wild Card To Watch In 2009" here on the MidemNet blog. In retrospect, I'm reasonably satisfied with my predictions for 2009 trends to watch:

• DEMOCRATIZATION -  Giving entrepreneurs, artists and even fans the tools to compete with the major labels and mass media.
• DATA -  Gathering and crunching actionable date. As you explore all of these new avenues for music discovery, what is working?  How do you break a band in 2009?
• MONETIZATION - If you can't make money at it, you probably can't keep doing it. But how do you monetize music in a down economy?

But my predictive powers failed me when naming the "13 Companies & 1 Wild Card". Is my wild card, Bopaboo, still in business? At least most of the other companies are and some are on the verge of breakthroughs. But I'm considering delaying any 2010 list until after I prowl the convention floor at MIDEM for 2010's companies to watch.

Looking back, 2009 was a year of retrenchment in the music industry.  But unlike the previous five years, 2009 felt like we were retrenching to somewhere rather than just participating in music's death march. These are exciting times. Who do you think will shape 2010?

Adam Rabinovitz, IODA: Marketing Mutualism

Adam Rabinovitz, marketing VP for indie digital distributors IODA (and MIDEM 2010 conference speaker), claims in this guest post that although the industry may now be open to all, this isn’t necessarily a bad thing…

Bruce Houghton’s recent MIDEM(Net) Blog post discusses how everyone is now in the music business, saying “Bad News: everyone is your competitor.” While that is more true today than ever before, it is also true that almost anyone could be your partner and ally. I often refer to this as “marketing mutualism” – where a common goal and interest aligns two entities in a way that allows them to explore and perfect their reasons for working together. 

Some companies will partner based on need, some based on possibility, and others based on demand. Not every partnership is going to prove itself in the immediate term, and not every new product is going to change the world, but by developing shared goals, testing new models and sharing and adjusting strategy based on the results, this approach will surely influence how quickly we can continue to drive innovation and growth in our industry. 2009 has been a very exciting year for new products entering the market, but we’ve really only just touched the surface of what is possible.

Peter Jenner: Exploring the future of copyright

The EU is offering the music industry a unique chance to help shape the structure of the online business that is so vital to the future of the recorded music industry. We can stick our head in the sand and hope that the current decline is a passing issue and that if we ‘hang tough’ it will all go away and everything will be fine.

Clearly the EU does not think this, nor anyone else who is not dependant on a large salary from a record (or other ‘content’)  company, or else is living in a time warp. The internet is a totally different method of distribution and reproduction, which relies on the end users manufacturing or storage capacity for reproduction and their broadband subscription for distribution. Furthermore each copy increases the total supply of files and this growth in the supply has no limit.

Forcing the legal and administrative system that was developed along with the growth and change in the music distribution schemes of the pre digital age into the digital world has clearly broken down. So much so that the EU has recognised it. So fundamental is the inevitable change in the market, and so incapable of being resolved by reference to traditional copyright and administration that they have asked for help. This call for help is broader and more daring than anything I have seen from any governmental or administrative body.

Ruth Mortimer: Rated 'R': Marketing Brand Rihanna

We've all seen popstar Rihanna pop up on stages around the world over the past few weeks, performing hits from her new album 'Rated R'. But there is more than to her reappearance than just a bunch of new songs.

The singer's comeback is designed to revitalise her brand as well as her career after a very public episode of domestic violence against Rihanna by her ex-boyfriend, fellow singer Chris Brown earlier this year. Her return to the spotlight has been managed carefully by a marketing agency.

According to AdAge, Rihanna got in touch during the summer with Steve Stoute, founder of marketing agency Transition and asked him to handle her comeback. Stoute says that his work with the singer is more about building her brand than standard record-company marketing.

"With brand work you gotta run a marathon. You can't just put out a single, sweep an issue under the rug and get out of it through popularity," says Stoute.

Denzyl Feigelson: Extraordinary People - The MIR Blonde Geek!!

As we move into this new era of how music is consumed, enjoyed and shared, an exciting part of our world is discovering the most extraordinary people doing incredible things. I have the honor of collaborating with one such innovator - Michela Magas, (nicknamed - The Blonde Geek), who is a wizard in conceptual design, systems architecture, iconography and new education methodologies. She has her own design consultancy, has helped establish new creative tech degrees for the University of London which are now being franchised around the world, runs tech projects at London's Goldsmiths University and has recently created an MIR (Music Information Retrieval) project she calls mHashup - a visual interface to large music collections for discovering musical relationships among tracks, using sound not words.

Keith Jopling: Real consumer insights can still create value for innovative music services

In this guest post, Keith Jopling, consultant and former director of strategic analysis and research for the IFPI, suggests the music industry lacks the insight of other sectors, including banking...

In 2005 Bank of America launched its ‘Keep The Change’ account, launched initially at middle-aged women with children – a segment that, in research, had expressed concerns about their ability to save money. These women also frequently managed household finances, taking responsibility for paying most family bills. BoA’s research identified that a common characteristic was for housewives to ‘round-up’ all bill payments to the nearest $5, so that an electric bill of $42.12 would be mentally registered at $45, for example.

The Keep The Change account allowed these women to pay their bills by direct debit or make purchases by a debit card – but debiting the higher amount – and cleverly dropping the difference into a savings account, thus solving the customers’ perceived problem with savings, in a way they barely noticed and saw as ‘a bonus’. The account was a massive success and was said to help bring in an extra ten million customers to the bank.

Why is this relevant to the music industry? The answer is that the product development and innovation at work with the Keep The Change account was based on valuable customer insight – a discipline that has been sadly lacking in music service innovations over the years. Music, like banking – is a mature business in need of new ideas.

Ted Cohen: Sixty Days Out, So Much To Think About

MidemNet 2010 is sixty days out & I can't wait to be back in Cannes!

2009 has been an amazing year for digital and mobile music, some of the notable events & game-changers, in no particular order:

• Spotify
• Nokia's 'Comes With Music'
• Topspin
• Twitter
• Google Search Box initiative
• YouTube/Warner Music detente
• The iMeem fire sale
• The debut of Hello Music
• Ongoing drama with:
• • Pirate Bay's wind-down
  • Choruss
  • Q Trax
  • ISP Levies
  • Playlist.com
  • Michael Robertson & EMI

I look forward to spirited discussion around:

• The future of music as service
• The role of ISP as gate keeper and fee collector
• Artist Development in 2010
• Monetizing the live experience
• Creating new revenue streams

It's going to be great seeing old friends & making new ones. The integration of MidemNet into Midem will finally join the present and the future of music, it's time to stop the hand-wringing and winging and get on with it!

See you on the Croisette!

Phil Hardy: The music industry in five years' time

The record industry in five years time: smaller, much smaller, but profitable

The collection societies in five years time: fewer, far fewer

The preferred storage and delivery format for recorded music in five years time: the encrypted card with the world’s repertoire will start to challenge downloads. The CD will still stumble on

The leading players in five years time: managers and music publishers, who will be able to offer exclusive access to and enhanced versions of the works of their artists; most of the other players will become secondary agents

The survivors in five years time: artists

Those who won’t be around in five years time: audio streaming companies.