Posted by: Catherine Holahan on March 11, 2008
The Interactive portion of South by SouthWest was winding down March 11, giving way to the music festival for which the Austin, TX, conference is most well-known. But the debate over the Web’s proper role in the music business was just heating up.
Much of the fire March 11 emanated from a heated afternoon panel discussion in meeting room 10. The presentation was titled “Ad-Supported Music, A New Hope for the Industry?” But it may as well have been named the fight for the future of music. The panel and the audience spent much of the hour intensely lobbying for their preferred method of music distribution and criticizing other models.
The panelists included: Ted Mico, head of digital strategy at Interscope/Geffen/A&M records; Peter Rojas, founder of the recently launched music blog RCRD LBL, an ad-supported music blog which enables visitors to download free mp3s and then shares the ad revenues with artists; Steve Jang, Chief Marketing Officer at music sharing social network imeem, and Simon Wheeler, director of digital for Beggars Group Digital LTD.
On the panel, the most animated discussions were between Mico and Rojas. Mico spent much of the panel arguing in favor of all-you-can eat subscription services such as Rhapsody and, perhaps in the near future, a similar offering from Apple's iTunes. (Rojas said during the panel that "We all know Steve Jobs and Apple are working on this" referring to subscriptions). “It is clear that somebody at some point will crack the subscription nut,” said Mico. “I do think that there is an aspect to subscription that is interesting because it allows people to discover music without having to pay extra for it.”
Meanwhile, Rojas, best known as the founder of tech blog Engadget, spent most of his time advocating business models that don’t include “selling” music at all. Instead, he argued, music should be used to sell other things such as ads, and then artists can be compensated with a portion of those revenues. Mico, who is very much in favor of selling music, objected to the idea that music can’t be sold. Though he did agree that artists should additionally be compensated with shares of the things they help sell—most notably music players such as Apple’s iPod.
One of the most heated discussions came when Rojas argued that music blogs are “a huge force in music right now and in some ways more important than the labels because that is where bands are being broken.”
Mico responded: “Different people want different forms of access but the idea that this is a blog and this is radically different than anything else is bullshit.”
Even that comment, however, was mild compared to the comments from the audience. People asked pointed questions of Rojas about just how much artists were compensated, implying that his model would not allow artists to make a living, and called out Mico and the recording industry in general for everything from antiquated, unfair contracts to resisting digital avenues that would be beneficial for artists. “Subscription is one that the record companies are trying to chase after because it is a great way to have recurring money,” said one audience member. “But for the consumer, what is the value that they get out of that?”
Though the future of music seems to always generate passionate discussion, I was surprised so many people appeared to have already picked a favorite business model. It seems to me that the music industry—still reeling from declining album sales—needs to try as many new outlets as possible in order to ensure it doesn’t miss out on new revenue streams. That means trying out ad-supported models, widgets that play music but then sell concert tickets or merchandise in support of the artist, social networks, and whatever else people develop.
The music industry has only recently opened the door for new models by finally abandoning certain restrictive digital rights management tools. The door should probably stay wide open for a long while.