Peter Jenner: Maybe we charged too much

Peter Jenner - president of the music manager's group, the IMMF - has already speculated that the fight against piracy might well have been a lot of effort in the wrong direction. Now, he's gone a bit further via the MidemNet Blog:

There is no evidence that there has been any serious decline in illegal use, yet sales have held up. Maybe we don’t need any more customer bashing. Maybe we should be trying to find new outlets and business models for our retailing partners, rather than treating them as the enemy. Maybe the penny is beginning to drop that collective licensing of digital services is the way to go, and that the development and encouragement of new altruistic filters (online and off), to turn our customers onto great new music is a good idea.

He also echoes the suggestion of Rob Dickins a few weeks back that maybe music has been overpriced:

Now they [the major labels] need to ask serious questions about their decline, and stop looking for easy culprits and facile solutions. Is the collapse over the last few years more to do with unbundling the album, failure to provide the right excitement in A&R, poor marketing and abysmal relations with retail that has led to the collapse of so many retailers (thank god for Tesco, ASDA, and Sainsbury for using records as a loss leader).

Maybe records were too expensive after all.

Maybe our core traditional audience wanted to spend their money on games, cheap fashion, getting drunk, and mobile phones rather than recorded music. Maybe we had ignored for too long the over 35’s who are probably the key buyers for CDs the premium product.

I still think we're a few years from most of the RIAA admitting that they were so convinced filesharing was the cause of all their woes they forgot to even run their own businesses properly - it's like an oak tree assuming its leaves are falling because of the mistletoe, as it started showing its berries around the same time. But it's encouraging that some people are starting to ask the right questions.

Perhaps Feargal Sharkey should have listened to the Culture Show programme, instead of complaining that it was so unfair.

Maybe in a couple of years.

Peter Jenner is a wise man

Thanks to Michael M for the link to Music Ally's coverage of Peter Jenner at the Westminster eForum. Jenner is the emeritus president of the International Music Managers' Forum - you might also remember from his other work managing The Clash and T Rex and... well, everybody else, more or less.

He's not convinced the record industry have really thought through their reaction to digital music:

“It seems to me that in the online world, the marginal cost of a digital file is essentially zero,” he says, making it an “inescapable reality” that the digital world is pushing the price of music towards zero.

“If we rely on a copyright law – i.e. a right to copy law – we’re clearly barking down a historical blind alley.” He says the comparison is making airline legislation based on the rail network. “There aren’t many signals in the sky…”

Jenner's central argument is that, with the record companies getting it wrong, now is the time to return control of music to the people who make music:

[He says] pressure for – for example – copyright extension is coming from the industry rather than from creators. They’re not worrying about whether their grandchildren will benefit from a song when they’re writing and/or recording it.

His solution, though, is probably just as unworkable - in effect, a levy on internet connection:

“If we can get £1 a month from every person in this island for music, that would give us £60 million a month,” Jenner concludes, suggesting that this would come close to the current value of the industry here in the UK. “It is not a huge challenge.”

Righto - it would be fairly easy to organise collection. But given that right now the music industry is worth about sixty million quid a month, and not everyone is paying, why should everybody suddenly have to chip in a quid?

Just philosophically - why? My Dad used to listen to Radio 2 and would sometimes see a band on the TV. But his musical consumption was already all paid for - the PRS payments took care of it. Why should he pay a pound?

I buy lots of music, certainly more than a pound a month's worth. But I'll be damned if I want to chip in money which will end up going to supporting, say, Robbie Williams or Katie Price.

Which leads us on to the other question: how do you split up this sixty million pounds? Or forty million, by the time the administration costs of just collecting the the money has gone. If I stick up a YouTube video of myself humming, do I get a share? And if I don't, why don't I?

Because if this money is going to reward people for the music they make being used online, then who decides when you move from being someone humming on a YouTube video to being a musician worthy of a slice of this pie? Is it if I sing instead of hum? Do I have to sing my own song? But then the Sugababes won't qualify for any of the money?

And if you do admit that anyone who does something musical online gets a slice, then frankly, that forty million isn't going to go far. And that's before you get filmmakers asking why they're not getting a bit. And vloggers. And... well, you get the point.

So the risk for those involved in music is that, by breaking the link between the music and the payment, you don't increase the amount of cash in circulation, but you do expand the number of people trying to get their beaks wet.

Jenner knows what won't work. I'm not sure he quite has a plan for what will.

Peter Jenner's still pushing for a music industry levy

It's getting on for three years now since former Clash and Billy Bragg manager Peter Jenner first floated the idea that the music industry should receive cash from a levy on the cost of digital connections. He's still banging away at it, although he's smart enough to propose that the telecoms industry might want to hide it away from the customer's eyes:

The Government can insist compensation has to be paid by the DSPs for the non-commercial, unauthorised use of copyright material. How they pay for this nominal amount is up to them. Maybe it gets paid out of customer retention and acquisition budgets, maybe through higher fees tied to higher capacity services, maybe through advertising or sponsorship or any combination thereof.

Interestingly, Jenner is suggesting that this money replace the current 'selling things' business model of the music industry. So what he's describing here as a "nominal amount" is actually the entire income of the British music sector. Which would suggest it's quite a large figure. Surely the pile of money is either nominal, or it's not? And if it is nominal, then why make a fuss about it?

Jenner then reveals exactly how nominal the sum he has in mind would be:

It is worth noting that the payment of £2 per month per customer with a broadband connection would generate £1.2 Billion, if there were 50 million broadband enabled customers in the UK. This sum is as big as the highest gross value of the UK Record Industry at its height, and at full price with no allowance for discounts, returns etc. This revenue would come through allocated to track without any need for warehouses, shipping, returns, salesmen, distribution, retailers etc.

So, it's as much money as the music industry has ever made. That sort of nominal figure.

Jenner's figures are about as meaningful as his argument is rigorous - at the moment, according to the National Office Of Statistics, there are 18 million households that have internet access. That's 65 per cent of all households, so even if the other 35 per cent of households did come online, you'd still only have at most thirty million; if you add in the 2.6 million businesses you'd still be struggling to get anywhere near fifty million. Jenner might be arguing that you pay the levy for every connection, but that would be even more absurd - why should someone who could listen to music all day, every day through a single connection be paying a quarter as much as someone who has broadband at home and in their office, and a work mobile phone and perhaps a personal one, but never downloads a single track?

But leave that to one side, and let's just look again at what Jenner is suggesting with a straight face: the music industry should be handed as much money as it has ever made on a regular basis, paid for by people who may or may not have touched any of their music.

One of this worries about the people he dismisses as "freetards" is that, if everyone took music for free and never returned a penny to the industry, why would the record companies ever bother to invest in new music? That's a fair question (although the answer - why do we need a record company to create new music - might make him a little uncomfortable), but isn't offering music industry businesses a guaranteed income that dwarves anything they could manage for themselves equally a fantastic disincentive to invest? After all, if you've just hyper-monetised the back catalogue, why would you bother pouring speculative funds into creating new stuff?

Jenner's idea is to tie the distribution of the cash to the individual tracks - you get a third of a thruppence or whatever for every play of one of your songs. Aware that this is going to be a bloody nightmare to administer, he suggests the creation of a meta-collection society.

What Jenner doesn't seem to have factored in is that, if there is a body distributing money based on a play-per-track basis, a large swathe of this money will have to go out the country: if I'm listening to a track recorded by a Canadian band, on a Canadian server, what moral reason could there be for not giving them their portion of a farthing that they would earn if they came from Camden? Likewise, anyone whistling a tune on YouTube could lay a stake to having recompense from this central fund. Because why should Jagger and Richards get money for their songs and not some bloke in the street? How much work would be involved in processing a fund that has to take account of every time anything musical comes out of a tiny speaker? And even with his unlikely sounding sum of cash, by the time it's been administered, and spread over millions of people, are such tiny sums of money going to do anyone any good at all? Perhaps this is what Jenner is thinking of when he says it's nominal.

In short, Jenner has proposed (again) an idea that is unfair, and impractical. Let's hope that nobody takes him seriously, and he's still punting this pipedream in 2012.