Monday, 15 November 2010

Music Futures #1

I've just got out of the first Musical Futures seminar (the event can be watched again via that link). I'll try to blog my thoughts and responses after each one this week.  Thanks to Generator North East for putting these events on.  This session was themed around the question as to whether or not digital distribution can save the music industry. The session was chaired by Paul Brindley from Music Ally.  The panel was consisted of Scott Cohen (Music Orchard), James Healey (Universal), Tim Hadley (Omnifone) and Chris McLellin (The Music Void).

The session opened with a representative from Music Ally stating that, despite some recent success (digital accounts for around 25% of sales), most of the markets in the industrialized world are beginning to stagnate, notably in the US and France.

Much of the discussion orientated around questions of technology, access and licensing issues. The general feeling from the panel was that the current pricing model of subscription services did not seem to correlate with the willingness of customers to part with the cash for such services. Currently services offered by the likes of We7, Spotify, SkySongs, etc retail around the £5-10 per month for a mixture of packages. Some include the ability to transfer tracks from PC so they can be played over mobile devices, while other deals occasionally include the ability to download and permanently keep a handful of digital files. The panel suggested there are about 2-3 million of these subscribers globally - not a terribly large figure.

One of the issues which didn't seem to get raised or addressed fully was why these services were not always popular. There was some general acquiescence that music listeners are getting content for free from P2P services or from sites like YouTube. It was also acknowledged that free services from the likes of We7 and Spotify might be enough for younger consumers who have grown up with digital services.  One of the reasons I've never been satisfied with these services is that more often than not there are way too many artists I like missing from the vast majority currently on offer.

Several times the conversation circled around the questions of access over storage. Several panel members (whose business model revolves around providing technology delivery solutions and infrastructure support) were insistent that streaming was the future of music consumption. However, they were less sure as to how these services should be priced or how long it would take for these services to become ubiquitous? It was noted that much music is consumed in the car yet the technology in these are frequently outmoded when compared to current modes of music consumption . Wifi enabled cars are not yet a common occurrence - hell, DAB isn't even commonplace yet. The design lead-in time of in car audio tends to be quite long so changes need to implemented sooner if it's to gain traction.  However, wifi enabled cars with some decent sized storage drive would enable 'over the air synching' of future music services.

One of the panelists was very keen on the idea of streaming and the willingness of music lovers to convert to paid-for services given the right incentives. The underlying assumption was that music fans will not be concerned about owning content in the future, especially as the young grow up. He compared subscription packages to the average spend of a BSkyB customer (which is something like £500+ per year). For him this was symptomatic of people not being bothered about owning content, but this is a strawman argument. BSkyB took a long time, almost a decade, to capitalise on it's market position and become profitable (there are many competing music services). It is also in a monopoly position earning large revenues on the back of its live sports offers. BSkyB is a very different proposition to a music distribution or subscription service as it is almost the only place go to watch Premier League football. It's not clear how this kind of model can be used to work in favour of the music industry. Bundling of services does already exist (eg Virgin Media's triple and quadruple play of TV, mobile, broadband, landline) but as many users of subscription services will testify, there are frequently glaring gaps in the music catalogues of subscription deals. Maybe this is how it relates to BSkyB - after all not every football game is ever shown?

Much was made of the next generation of 4G mobile broadband. It will be able to deliver much greater bandwidth and thus provide a revolution in terms of music consumption across a much bigger range of internet capable devices than currently exists. As for who will pay for these networks to be rolled out and how musicians, labels and music fans will benefit - these were largely ignored.

Overall, the panel was quite skeptical about the long term future of physical formats like CD and vinyl. However it was noted that physical formats will always have niche appeal in terms of collectors items or gifts for family and friends.  Very little consideration was given over to the various uses people put their music to that streaming fails to support (notably DJs and music creative who remix, edit, mash-up content).

More to follow tomorrow hopefully where the session will be broadcasting or distribute...

The Twitter hashtag for the event is #musfutures in case you want to follow proceedings although it must be noted there seemed to be some issue with the wifi signal in the basement of the Northern Stage. I ended up tweeting via text message in the end. It might have just been me?

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