Bookmarks: Some stuff to watch on the internet

The MIDEMNet blog has posted a number of sessions from this year's music industry electronics gathering, including a conversation with Radiohead manager Brian Message and why knowing your fan matters.

Sadly, there's no film of the heads of the four majors trying to prove their understanding of new technology by trying to set up a teasmade.

MIDEM 2009: Empty places

Yesterday I mentioned Gerd Leonhard's guesstimate that the attendance at MIDEM was down by anything up to 20%; Bruce Houghton over on Hypebot has the official figures:

In the end, the Cannes mega-conference appears to have dodged the bullet with figures released by organizer Reed Midem showing a 12% drop in attendance to 8000 from 9100 in 2008.

Hypebot suggests these are pretty good figures in the circumstances, and points out that all the key players were there. Although it makes you wonder who the one in ten who didn't show up were, then.

MIDEM 2009 off by as much as a fifth

Having spent much of the weekend being patronised by the likes of Feargal Sharkey, it's not surprising that Gerd Leonhard spent much of his time wandering round Cannes laughing at the ashes of a once-great business:

Here in Cannes, France, at the annual MIDEM music industry conference, we have once again debated and contemplated (and wined and dined and smoked) for the last 5 days. We have noticed some 15-20% less attendance, empty restaurants and much-less-than-usual action in the exhibition halls - the music industry as we knew it is OVER. And good riddance. The organizers tried hard (and did well!) but you have to wonder: what are you (the industry) waiting for? Is it not time to VOTE FOR SERIOUS CHANGE in the music industry, and make that switch to an open, collaborative and mutually fruitful ecosystem? Like... now?

If the music industry will no longer send its top level staff for some winter sun on a French jolly, they might well be asking themselves what's the point of going on?

MIDEM 2009: If you can remember the internet, you hadn't logged on

Donovan has told MIDEM that the internet is the new 1960s. He has attempted to explain what he might mean:

"The dream of the '60s, of me and John Lennon and the others, was: How do we speak to everybody on the planet at the same time?

"The first answer was via satellite, but that didn't connect to everyone. Then John would say, 'How about telepathy?'

"Then we forgot about it until now we realize that the Internet fulfills that dream of communicating with everyone. I'm not afraid of the Internet because it's that the dream we had. The Internet is the new '60s as far as I'm concerned."

The use of internet rather than telepathy makes it easier, but the RIAA have already employed a lobbyist to encourage Congress to shape laws covering intellectual property rights in case people start thinking the new Kid Rock single at each other.

MIDEM 2009: Man - the lifeboats?

The Isle Of Man government has introduced plans for a blanket music tax on broadband services. The BPI is - at least publicly - being all pleased:

"If ISPs take the position advocated in the Isle of Man, we’d be in an enormously better position," [The BPI's Geoff] Taylor responded.

The Register's Andrew Orlowski isn't quite so sure:

[M[any in both the tech business and the music business are wary of a government-imposed licence fee. A voluntary subscription scheme would provide an incentive for new services to be created - P2P service providers would compete for your custom. Such a voluntary P2P scheme is expected to be announced from a major UK ISP within a few weeks.

With a compulsory licence, ISPs would have no incentive to look after music sharers or differentiate themselves - everybody would be able to offer anything. And privately, labels are wary that collective agreements set a low floor price for music royalties.

Ah, but this is the Isle of Man we're talking about here, and it's more than likely that the music industry will see a small island in pretty much the same way the British military saw Gruinard: a place to test the most toxic stuff away from the major centres of population. If it all goes wrong, and results in the music industry losing more control, they've only lost a tiny market. If, on the other hand, it means the big four get a disproportionate chance to hoover down revenues from the licence, then that could be a prize worth the risk.

[Thanks to Mikey for the story]

MIDEM 2009: Placebo taken by Sam

After the digital stuff, MIDEM turns to the music, and amongst the early announcements is that Placebo are signing to PIAS for the next album. They could have had their pick of the majors - they say - but instead fell for PIAS small-scale, big-idea charms:

Placebo frontman Brian Molko said “We are delighted to be signing with [PIAS], one of the world’s most respected and successful independent music companies. We were very lucky to have so many great labels interested in signing us, it means a lot, especially after 12 years of releasing records!! But we now feel we have the right partner for Europe in these ever-changing times to continue this crazy adventure and to scale even dizzier heights with our new record".

Two exclamation marks and "scaling dizzy heights" in "ever-changing times" - let's hope that he's putting a bit more effort into the lyrics than he has into the press release.

Still, Meds was a splendid album, so let's hope a smaller, more loving environment might bring about something even better, so people stop going "what, really?" when you tell them you like Placebo.

MIDEM 2009: Google regrets

PaidContent's Robert Andrews reports back on the MIDEMNET session with Google's content partnerships VP David Eun. His poorly-disguised frustration with a music industry that thinks that the internet owes it probably means he should be kept away from Feargal Sharkey:

"Lots of people 'get it'. On the other hand, there's a culture (amongst music execs) where 'these are my interests, meet them, if you can meet them then maybe you can have access to our content'. There's really not a concern for the other person's business (ie. Google's) - (they say) 'if you can't figure out how to make it work, that's your problem'. If that becomes systemic, you decrease the number of partners you can have."

He also spoke a little about Warner's current exclusion from YouTube - and sounded like a man who, while not uncaring about one label's absence from his service, isn't all that desperate about it, either:

"I think it's unfortunate. The only way a partnership works is if it works for both parties ... You can't force someone to be a good partner - you can force them to follow contractual obligations, but you can't force them to be a good partner. The way you become good partners is to give them incentives to go beyond what the obligations are. We don't have that type of relationship with everyone or with Warner Music right now ... but we hope we can find a way of working so that both parties are happy working together."

Sure, it'd be nice to have those guys on board again, but perhaps they don't want to play, said YouTube from the top of its goldmine.

MIDEM 2009: Clash of the giants

Another meeting between Gerd Leonhard and Feargal Sharkey, reports Music Ally:

The most heated section saw consultant Gerd Leonhard accuse the music industry of desiring rules that are “just not reasonable”, provoking a stern rebuke from UK Music boss Feargal Sharkey.

“I don’t think that imposing one vision on all of humanity is the way to go,” he told Leonhard. “It’s slightly arrogant to come and tell two very successful industries that they don’t know what they’re doing.”

Sharkey is in charge of UK Music, who are pretty much dedicated to imposing a single vision on all of humanity wanting to use music in a digital environment; what angers him so much is that he must know, in his heart, that Leonhard is right in his diagnosis, even if you don't totally accept his solutions.

And "two very successful industries"? Well, it didn't take long for someone to point out the baselessness of that claim:

Pete Jenner, who was on the panel: “Two very successful industries? We’re talking about the record industry, which is in the fucking dumper!”

Indeed. Perhaps if you're actually at MIDEM, Sharkey isn't coming across like one of those stock thugs they have on Casualty every couple of weeks who hurls abuse at the paramedics trying to help him, but certainly from this distance he's making himself look like a petulant closed-mind. UK music needs better, even if UK Music, the organisation, probably deserves no better.

MIDEM 2009: Share in the profits

Every new development online tends to spawn a start-up which pledges to do the same sort of thing as everyone else, but to reward its users with "a share of the revenue". There were even companies which were going to share revenue with people simply for reading their email at one point.

Strangely, I can't think of a single instance of one of these start-ups turning into major players. Perhaps because they rely on advertising, and to make money from online ads, you need scale. If a user is getting a portion of the ad revenue from their limited range of online activities, then you're talking about very small sums indeed. And would you really choose to abandon, say, Hotmail or YouTube or MySpace in order to make a few cents a week?

Still, it's a business model that keeps being resurrected, and the latest outfit trying to buy users with a slice of ad money is at Midem. They're called Snowfish, and hope to attract a social networking audience with quarters and dimes:

“We don’t want to repeat what today’s social communities are already doing,” says CEO Ludvig Werner. “The launch of Snowfish will put the consumer in control. All of a sudden, everything has value!”

The company says it has a number of advertising deals in place, and will pay out users’ revenue share via PayPal on a monthly basis.

You have to wish them luck, but I suspect this is one of those ideas that won't shake the internet to its fundamentals.

MIDEM 2009: Katy Perry takes Rihanna's prize by mistake

The traditional curtain-raiser to MIDEM (if you ignore MIDEMNET having already raised the curtains), the NRJ French music awards, managed a spot of Brits-level debacle last night, with Katy Perry waltzing off with two prizes, only one of which was intended for her. She somehow was given the award for best international song, despite the judges having voted for Rihanna's Disturbia instead. BBC News:

Perry did legitimately scoop the best international album prize

Well, she might have been the intended recipient, but as to if her claim to have made the best album in the world outside France in 2008 is "legitimate", that would be a different question altogether.

MIDEM 2009: Can ISPs and music companies play together nicely

One more dip into Music Ally's excellent coverage of Midem, and in particular a panel exploring the chances of ISPs and copyright companies finding ways of working together constructively. Gerd Leonhard was one of the panelists, attempting to share some of his insight into the remaking of the music industry online. And what does he get for his pains?

Feargal Sharkey, that's what:

He cautions that the industry needs to remain acutely aware of music’s role in the bigger picture of “a digital economy and a digital culture”. And now he takes aim at “pseudo-intellectual cyber-professors”. Cor! “This is a creative and commercial challenge that can and should be solved by creative and commercial solutions,” he says.

Oh, yes. God forbid that the music industry should pay any attention to what people who understand the web and where it's going might have to say. After all, if they'd fallen into that trap back in the 1990s they might have forseen Napster and done something about it before their business models got smashed to pieces.

This smug, rude embrace of ignorance and the belief that experience of flogging vinyl in dump bins at Our Price is of more value than having studied the market place has already holed the music industry. How does Sharkey think that record labels or collection agencies can shape their "creative and commercial solutions" if the choose to ignore the people who can explain how going online changes people's behaviour, or who are already exploring the implications of the next wave of internet developments?

Sharkey's snarky reminds me of the people who turn up on Property Ladder and then set about ignoring all Sarah Beeney's advice because - while she might know what she's talking about - they're the ones who own the house.

Something else Sharkey said caught my eye:

the value of music has been sucked away through unlicensed unapproved copying and sharing

But, clearly, that's double-decker nonsense. Upstairs, it's wrong because billions of songs are being sold online, and record labels are still making millions of pounds, and advertising agencies are licensing tracks for thousands of campaigns. Downstairs, it's rubbish because Sharkey has been wearing suits too long, and can apparently only conceive of the value of music if it comes in a form which can be measured in pounds, shillings and pence. Nowadays, if someone told him that hearing Teenage Kicks made John Peel pull his car over and cry, Sharkey's response would be "but how can I monetise those tears?"

Also on the panel was the UK ISPA's Nicholas Lansan, who effectively spent his allotted time stressing that making laws wasn't going to stop file-sharing, and had this to offer:

[A]mong consumers, there’s a lack of understanding of copyright issues, and frustrations with DRM.

The second half, perhaps, Mr Lansan. The first half, though, is probably wrong: Consumers generally do understand copyright issues. They just don't care. They don't believe that filesharing a cheeky track or two will mark the end of music as we know it. They don't care that Paul McCartney and the ghost of John Lennon have issues they need to talk through with Apple before you can legally download Please Please Me; they just want the track now. The belief that the public don't understand is patronising, and attempts to shift the blame for the spread of free music on the public. The people who don't understand copyright issues are actually the ones who hold the copyrights, and what they don't understand is that if they choose not to share, their copyright ceases to have any value whatsoever.

MIDEM 2009: MySpace waft out their music CEO

Music Ally continue to bring the freshest coverage of MIDEMNet, covering an appearance by Courtney Holt, who has arrived to run MySpace's music offering from Universal.

He talked a little about how MySpace will try to make money from online music, given that he sees free downloading as the "main competition". It's all about adding value:

The MySpace Secret Shows are one example, he says, where bands play smaller gigs for their fans. “Those types of programmes are really relevant, we’re going to expand into more of those,” he says.

Curiously, then, the main driver for marketing MySpace music - which offers the chance to put your music in front of the largest imaginable audience - is a series of teeny tiny gigs where you play music to the smallest possible audience. I'm not sure they've quite thought this one through.

Are they selling much?

Amazon is proving a good partner, although “we need to make the intent to buy and the purchase a little bit easier”, although MySpace is seeing “increasing intent to buy”.

What’s that? “People are clicking on buy links,” he says. “It’s gonna take some time, we know that’s challenging, but it’s also important to all of our partners.”

That, of course, is the sticking point: are MySpace making any money from this? Are the labels? And are the labels as prepared to wait as long as News International to see the massive MySpace audience start to turn into big piles of cash?

It turns out that MySpace has one strong card in persuading patience from its RIAA partners - not being Apple:

“The terms that we’re cutting with everybody are fair deals for us to be able to run this business. The labels do want to see other people survive as digital music offerings [than iTunes], they want to diversify their revenues.”

This, though, might prove a problem in the long run - if MySpace hope to replace Apple as the dominant music retailer on the web, the record labels would be just as unhappy as they are with the idea of Apple dominating.

MIDEM 2009: Comes With Music, but that's easily dealt with

The pre-Midem MidemNet digital music conference is underway down in the South Of France, where somehow these companies who have to fight for every cent have managed to send their executives and sub-executives to find out stuff they could get for free on the internet.

Musically has been liveblogging an interview with Dr Tero Ojanpera, the EVP of "entertainment and communities" with Nokia. He has, obviously, been talking mostly about Comes With Music, giving an interesting little nugget about the "fair use" limit, and how it's not just us who is curious to see exactly where that limit might lie:

“We are seeing some people downloading hundreds of tracks a month initially, but when the base expands this will be even more like a bell curve. There were some bloggers who went and downloaded a lot, but once they noticed Nokia was not doing anything, they gave up! We are not really seeing anybody who is abusing the service. It’s validating all the research that was done before - this is how people will use it - some will use a lot, some will use a little, and it will average out.”

You'll notice he doesn't say that Nokia believed that the exploratory downloaders failed to breach a limit of fair use, just that Nokia chose to not do anything. Sadly, nobody seems to have bothered asking Ojanpera why the company won't just come out and say what it considers to be fair use of its service, and why it childishly keeps the figure secret.

Why doesn't it trust its customers with the actual rules for a service that they're paying for? It just seems to be cussed secrecy for the sake of it.

Also interesting is that some people are buying Comes With Music handsets, and not bothering with the music:

“What we are seeing three months in in the UK is that the consumption pattern is like a bell curve. There are certain users that don’t activate, and then a really nice bell curve where we are seeing good downloads in the middle and…”

[Moderator Bill] Werde [of Billboard] interjects - why are some people not activating? Ojanpera says some simply missed the offer. Bizarre.

I'll agree with Music Ally's "bizarre" response - given that the marketing is garishly insistent about Comes With Music, the suggestion that people might not realise that their Comes With Music phone comes with music seems a little odd. Surely the other possibility - that you can offer people unlimited music for no extra money, and they can't even be arsed to explore the offering - is far more fascinating. And worrying, for the music industry. And psychologically fascinating.

And are people buying in to the service in large numbers?

So, the UK then. The price point of the 5310 has lowered, and reports suggest sales aren’t good. Why? “I don’t want to put you on the spot” says Werde. Why not?!

Anyway, Ojanpera’s response, pointing out that Nokia has been expanding the device base for CWM in the UK. “Our target is not any more about ‘this is a few specific devices’, but going forward we will have this in all price points, and make this a mass-market phenomenon.”

Surely, if you can have Comes With Music in the cheapo end of the market, that must mean the money that's flowing to the labels, and then on to the artists, must be piffling beyond belief?

And what about the simplicity of the offering?

Is the offer simple enough, asks Werde? “One thing is of course, this comes back to the marketing, and that needs to be fine-tuned all the time. The actual product is so simple - one year of music, unlimited downloads in your phone and your PC. That’s simple enough, and a great offer.”

Of course, the offering isn't simple at all, when you look at it - and get down to fine details of owning the tracks forever, but requiring a DRM key, which you can only change once past the subscribing period. It's not that this is a totally unfair rule from Nokia's point of view - if you run DRM servers, you're not going to want to commit to long periods of fiddling for people who aren't paying you any more - but it complicates the offering more than it should. Interesting, then, that Nokia don't seem all that bothered about trying to crawl out from under the DRM tarpaulin.