Thursday, September 23, 2004

KENNEDY SHOOTINGS: The man who currently runs the UK branch of Universal Music Group, John Kennedy, is about to take over the reins at the IFPI (or, rather, those reins which aren't held by the RIAA, anyway). He used his In The City keynote to give an insight into the way his mind works, (reported by the Register), and the thought of him being at the top of the world record company pyramid is one of those dystopian visions of the future you usually only get on the Sci-Fi Channel. In fact, we did wonder if it was all some sort of joke at first.

First of all, he made clear his love of the lawsuit as a way of communicating with you customers. He has no sympathy for the twelve year old girl whose council-projects family are having to find thousands and thousands of dollars to keep the RIAA from their door - everyone else in the world can see that this was a rubbish move; only a real Scrooge would think that sort of move was a positive PR victory. Kennedy could be that Scrooge: she was a "serious file sharer." Except, of course, she had a few TV themes and a couple of nursery rhymes. Does Kennedy really believe that this twelve year old was a threat to the music industry? Really?

But he was only warming up. Many people have queried the RIAA's claims to be doing it for the artists, suggesting that any cash the organisation claws back is going to disappear into the labels' bottom line rather than to the people who make the songs. Kennedy's answer to that is "Yes - and?":

But he had even less sympathy for songwriters, who receive only a small fraction of royalties that recordings owners receive. that was fair, he insisted, as hits were down to investment in marketing, he said.

He's right, of course - who can forget the time their eyes met across a crowded room as the DJ was playing a song released on two CDs, one with live tracks on the b-side and the other with a video? And surely thousands of babies must have been conceived to the sweet sounds of the track supported by a nationwide 32-sheet campaign and thirty second slots during Coronation Street?

He then went on to claim that record labels spend more on R&D than technology companies - an astonishing claim that would be even more astonishing if it was true. Kennedy said he'd worry more about the plight of the sonmgwriter if record companies had fifty per cent margins. In other words, in Kennedy's view, the artists don't mean shit. Record labels are little more than shops, and there's no creativity at all - it's all down to the magic of the marketing. At least this is a pleasing signal that the cant about labels being interested in protecting artists is over - now, the truth: the artists are little more than irritants, eating away at the bottom line. Their contribution to the process is incidental. Bernie Taupin? He'd be nothing without a gatefold sleeve and a full colour Point of Sale display in Asda.

Students in the US have stopped illegal downloading because of the lawsuits:

Kennedy said that the practice of sueing file sharers had government support and had begun to make a difference, especially in US colleges. Students knew that if they were caught drink-driving they'd face jail, or downloading an exam cheat from the Internet, they'd face expulsion; but students could download music with impunity. The music industry is keen to impose a per-college tax on students for sharing files, although the students lose the music when they graduate.

This is a little disingenuous - the implication that students have stopped - and let's use his language - stealing music because they've been scared into it by the suing of twelve year old girls; they've stopped because the colleges have been bounced into setting up "legal" download systems. Many colleges are now forced to charge students a fee to cover subscriptions to the likes of Napster whether they use them or not. The presence of a legal download option that won't cost them any more is what's stopped many students using file sharing, not the legal actions.

We actually agree with his observation thatin the past labels had "got greedy and decided to be retailers as well as wholesalers," he said, and had forgotten that the record company isn't a brand that means anything to the mass market., although, oddly, it was Universal (Kennedy's former employer) who pushed this the hardest - even sticking "Universal" idents at the front of their record ads, as if to try and make people care.

Someone from The Observer asked why Apple had been able to make a success of the iPod when the record companies had failed. Sniff. "A hardware company came up with a sexy piece of hardware. A record company couldn't do that." Oh, no? What about Sony, who must have been in with a shout? And Philips managed to come up with both the compact cassette and the compact disc while simultaneously running a pretty succesful record label. And the early 45 and 33 formats were created by record labels rather than electronics companies. So, Kennedy is just plain wrong - this is the first major form of music delivery that hasn't been driven by the music industry. And that's probably a sign that the era of the record company is really coming to an end - it's become dependent upon other sectors to get to its market.

Not that Kennedy thinks its about to game over - we still need record companies, you see:

"No unsigned band has been broken by the internet," he said. "Bands are screaming in space on the internet."

And, to a certain extent, that's true. So far. But it's only a matter of time now. What Kennedy fails to factor in is that, on the internet, it equally doesn't matter who your backer is. Sooner or later, someone's going to put funding into a band who make a profit and a reputation online. Had there not been the dotcom crash, it would have been happening by now, actually. Tesco or the Princes Trust or even Apple could put up the cash. When you needed a full infrastructure to press and distribute a physical record, you needed a physical record company. They put up cash, but they also had a network that was vital. As actual record sales yield to the download, all you're going to need is the money half.

Kennedy does like the download, though, provided it's all legal and DRMed:

"For 79p you've got a work of art that's like a Picasso, only one that's as close to the original as you can get."

We think the analogy with Picasso - whose work now sells for prices that are ridiculously out of whack with what they're actually worth - wasn't intended to be a signal that he thinks that 79p is too much.

Finally, just a thought: Kennedy is soon to be at the head of the global headmastership, ticking people off for breaking the rules about copyright. However, he made this observation:

At Polygram (which became Universal), Kennedy had stopped the practice of chart-fixing, he said, "because we were so bad at it. Songs that were supposed to chart at No.6 were coming in at No.34".

So, he stopped chart-rigging not because it was wrong, and against the rules, and almost certainly illegal, but because they were shit at it (despite, erm, the magic of marketing, oddly enough). Presumably, if they'd been good at it, he'd have happily carried on waving through the buying of chart positions. Something to bear in mind when he starts lecturing us about how poor twelve year old girls are immorally stealing records.

1 comment:

Anonymous said...

Excellent, if scary post.

As for the rise of the internet band, well it's never going to be his specifications, is it ???

(see for example ;)

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