The Revolution Media Blog

Caroline McGuckian

It has been another interesting few weeks for the music industry. In the same week that Spotify’s iPhone app has stormed to the number one spot of iTunes Top Free Apps within just 48 hours of Apple approving it, we have had Sony and EMI come out and slam Virgin’s plans to offer a subscription based music download service.

This of course this is nothing new from an industry that is determined to avoid change of any kind. The industry has even been given renewed confidence in recent months as Peter Mandelson waded into the debate by announcing the government’s plans to cut off the internet connection of those who file share - a government decision even more extreme than Lord Carter’s recent Digital Britain report. Mandelson’s intervention may well have been influenced by recent meetings with certain music industry figure heads; but it highlights (as some commentators have suggested) that this really is a case of an analogue man living in a digital world. Trivial details such as who is going to be responsible for regulating this across ISP’s and not to mention who is going to pay for it, as usual, seem to have been brushed aside as minor formalities.

Whilst this Government backing may show signs that the music industry is winning its battle to desperately carry on with business as usual, I feel it may be short lived. In recent weeks we have seen YouTube lift its block on music videos after the PRS and Google came to a licensing agreement.  Whilst the lump sum has not been disclosed, I wouldn’t mind betting it is a lot less than the PRS was initially demanding. However, a deal was always going to have to be struck as the prospect of cutting off one of the industries key marketing channels was never a long term solution.

You might hope that this is a sign that the industry will start to face the realities of the digital world it has resisted for so long. This however will not sit easy with the major labels; they have for too long enjoyed far too much control over their distribution channels and avoided any deviation from their long established ways of doing things. Losing grip of even a little bit of this power does not sit easy with them. However, no matter how much government support they are able to drum up, a business model that relies on harassing, bulling and even suing its customer base seems destined for failure.

It has of course been obvious for years that the music industry will eventually have to move with the times and face up to a changing market which is seeing their revenues dwindling. What they seem to be missing is that people sharing and accessing music for free has always been a vital life blood of the music industry. Ok 25 years ago you had to sit down and make a mixed cassette tape, but the point is music has always been driven by a buzz that is created from people talking about and sharing music. The technology may have changed the scale on which this is possible, but this has also expanded the potential. 

People have to make living and it is yet to be seen if the likes of Spotify, Virgin and others can actually turn a profit out of subscription or ad supported revenue. My guess is that the industry will have to start embracing a more varied approach and spread their interests across licensing, ad supported revenue, subscription, merchandising and live music promotion. And yes there may even be a case that people will pay for a certain amount of digital tracks, although I feel a higher quality offering than is currently available will be needed. Naturally the major labels will continue to lobby for the government to support their out dated business models, but sooner or later they will have to take their heads out of the sand and come to terms with the fact that a more creative use of digital channels is the future of their industry.