Time to bring back proper music television

Are Andy Burnham MP’s recent flirtatious comments about music on television an example of how far out of touch politicians can be from the industries that they represent, or is this the incisive intervention of a culture minister who is enough of a music fan to have a go? Was he really angling for a return of Top Of The Pops (TOTP) as some reporters interpreted? Surely not – that would be more than being just out of touch – it would suggest a tendency towards clumsy meddling.

Observing the industry’s response to the ultimate demise of TOTP a couple of years back was bleakly, sardonically amusing. This was like a music industry equivalent of a national wake on the scale of the death of Princess Diana. There was shock, grief but most of all a lack of acceptance. ‘How could the BBC has allowed it to come to this’? Music Week was awesome that week, especially a charming story about the BPI acquiring some rights to the TOTP brand. What were they thinking?

For a much more insightful review of the current state of music television you can read the Alexi Petridis cover story account in last week’s Guardian Film & Music (what a wonderful supplement this is for us lucky UK content fans – see my blog links). After spending a whole day surfing music based channels on mainstream TV (i.e. the telly itself not the internet version) and talking to a few wise owls in the production business Petridis dissected the current status quo succinctly as follows:

1. There is actually more music on TV than ever before – just not during prime time.
   
2. Subsequently, today’s music channels don’t feel like community viewing and they aren’t since viewing figures confirm hardly anyone else is watching.
   
3. Pure music programming (i.e. excluding X-factor type formats) never pulled in huge audiences in the first place, with TOTP very much an exception to the rule.
   
4. Music ‘television’ currently exists in a more invigorated form beyond the TV itself (i.e. online & mobile – an observation made by Malcolm Gerrie of Whizzkid).

It does seem that the last place to look for music shows is television, but only if you go to bed before midnight. Musically speaking, as a child of the 80s myself, there is no modern equivalent to The Tube (produced by Gerrie mentioned above) – a thrilling, edgy magazine show that not only showcased great music but delivered it with such swanky verve – ushering in the weekend brilliantly. But there is 4Music, Later With Jools Holland and Live from Abbey Road. Buried away deep on Sky Arts you can find the wonderful From The Basement, while BBC’s 3&4 are superb for archive music documentary. But the actual dedicated music channels – all 30 of them – are arguably all underperforming for their host networks these days.

The problem is that the majority of the target audience for these shows actually goes to bed before midnight. We’re beyond 30, we’ve got demanding jobs and kids and we are exhausted by 10.30 on a Thursday and a Friday night. It would be great to wind down with some quality music programming but we just can’t hang on that long. And the show line ups often fall a bit short to make that extra special effort don’t they? How often do major A-list acts crop up on the current crop of music shows?

We know from endless reams of research that the 18-24 year old audience are not watching telly but busy multi-tasking their way through a backlog of internet bookmarks, messages, texts, twitter feeds, downloads/uploads and maybe a touch of revision.

Basically, one has to ask: who are music television shows being broadcast to exactly?
We do have iPlayer of course and we have PVRs, so some of the target audience will get ‘round viewing music shows. But still, TV is not exactly a mainstream platform for new potential superstars that it once was.

But new platforms aren’t great for music shows either. The internet is actually more problematical for music than television is. Despite a recent glut of internet music TV destinations (Muzu.tv, MOG.tv, Pitchfork.tv, FabChannel, et. al. – some of them quite good) there are major barriers to the success of internet music television. There isn’t enough variety, depth and most critically, quality of content to go around. The reason for this is that these new internet based networks don’t/won’t/can’t pay decent prices for content. In short, there isn’t a working business model beyond promotion, yet.

As recently stated in a Deloitte research report (Loves Me, Loves Me Not, Perspectives on the UK Television Sector) “Until there is clarity over how the internet may pay its way, more and better quality content may not be forthcoming”. That’s absolutely true. It hardly matters that the internet actually surpassed TV this year as the biggest platform for advertising expenditure (according to Ofcom), because the individual destinations on the web simply aren’t rich enough to license, distribute or create the best content.

Here’s the supply-side problem in a nutshell: if you have a branded platform on the internet, it seems it’s not economical to pay good rates for high quality content, because your ad CPMs won’t cover it and you haven’t figured out how to make users pay. If you are a content producer, you can’t make content of the quality you want to if you can’t license it at a profit to the platform providers. It leaves a business in search of a model and a potentially massive audience without the content they would love to see. So we all have to get by on YouTube.

This analysis is all a bit sober and it doesn’t reflect my optimism for the future of music television at all. So let’s look at some of the possibilities.

First, the emerging live performance streaming business online. FabChannel and the forthcoming Love Live both represent lively new entrants in what must be seen as a promising sector. The previous supply-side barriers of technology (mainly bandwidth) and licensing seem to be coming down, the latter at least for non superstar acts. On the demand side, recent consumer research from Entertainment Media Research referred to the sector as ‘a potential goldmine’.

The real problems in this still nascent sector go back to business models. With FabChannel insisting on streaming being free, we may once again be setting too low a bar for what consumers are willing to pay to watch concert footage online. Relying solely on ad revenues simply won’t cover production costs be they £10k per hour at the lower end or ten times that at the high end.
Recent music releases in the theatrical sector have also been interesting. Last year VUE Cinema’s live, satellite fed showing of a Genesis concert in Düsseldorf (to multiple cinemas around the UK, broadcast in a unique high definition mix with Dolby Digital 5.1 audio) was an example of a new, much needed release window for music content. Though only valid for superstar acts (why Genesis though? Have you seen a more sedentary live act?) the idea of paying £10 to see a beautifully filmed, surround sound performance might be an attractive proposition for many music fans. I’ll be interested to see how the forthcoming Arctic Monkey’s movie release does.

Both online and theatrical platforms for music also make sense in the current economic climate. The looming recession is bound to hit the live sector hard and music fans may wish to get their live music fix in cinemas at a small fraction of the actual concert price. After all the live boom of recent times has not been about the art of performance as much as social drivers – the need for people to get together and party basically. If VUE, Odeon or other players can do something clever to meet these social needs, with great content at the core, they might crack open a new market.

But enough of niches, don’t we now have mass market technologies that favour music content both in the home on the sofa and out and about? Just about everyone has now invested in a HD ready widescreen TV – so can producers and networks deliver the content worthy of this new platform that gives audiences a much better audio-visual experience. The same goes for touch screen mobile. Ideal for music television, maybe not for screen size, but certainly for the combination of mobility and audio experience (watching a music video or live clip is far superior with headphones plugged in and the volume turned up – try it).

It seems to me we now have enough platforms for new music television formats – of the magazine type, music documentaries, films and filmed live performance. All that’s lacking is the content itself.

So maybe the UK culture minister is really onto something. TOTP is long gone, but we music fans deserve better than the current crop of music shows on offer. ‘Later’ is tired and the newer shows like Live from Abbey Road are just a little too high brow or lacking in really enticing line-ups. This is the perfect time for producers to come up with something new and exciting and for business thinkers to create a business model that can sustain itself.

Footnote - QUICK PLUG - The wonderful MUSIC TANK are running an event Tuesday 21st October at which i will speak about digital service development present, past & future - see links

Total Music will leave real music fans wanting

I’ve read with interest some of the coverage over last week’s announcement by Nokia on its highly anticipated Comes With Music service. It’s fascinating how much of the debate has missed the point entirely. The two most major of many criticisms levelled at Nokia have been for the fact that the service is a) heavily DRM’d (not MP3) and b) non renewable without a new device (i.e. not a music subscription service).

Those look like heavy limitations – and they are. But that isn’t the point of Comes With Music. Nokia isn’t really launching a music service so much as the mother of devices that happens to have music on it. Since nobody, including Nokia, knows quite how consumers will respond, the whole thing is an experiment – but a pretty significant one for the music industry.

You can see where it might lead. Project ahead just a couple of years. Buying a new hi-fi for Christmas – great - do you want the one with or without music? New car – with or without music? Laptop – same. No wonder the clever Omnifone is in discussions with servicing these platforms.

New fridge, microwave, disposable razor – would you like that WOWM (with or without music)? Maybe that’s going a little far but you get the point. One way or the other we are rolling slowly, inexorably towards music ubiquity. And, for many of us, that is both a hard concept to accept and an even harder one to understand from an entertainment point of view.

Think of an example – how many of your favourite albums did you become instantly attached to while snacking through it track-by-track , 30 seconds at-a-time, on your phone, on the bus, in a hurry to get to work and in a bigger hurry to check out the other 116 tracks you downloaded that morning? Answer = none. To really enjoy your music it just can’t work like that.

A few years back when Napster and Rhapsody launched what will now be known forever as ‘1st generation music subscription services’ i had a good play with both. For the first three months i was like a kid let loose in a sweet shop. The ability to sample whatever new music you wanted when you wanted (remember Windows DRM 10? I got it working on one Creative Zen device with both Napster and Rhapsody side-by-side! It blew up, but it was beautiful for a while there).

Then something curious happened – actually two things. First, i became blind & deaf when i signed in – i just couldn’t decide which of the 3 million songs i wanted to hear at that moment. Second, i got fed up spending all my precious listening hours ‘sampling’ new stuff that i didn’t ever get to really like. I listened to a lot of crap basically. I also suspect that most of it actually wasn’t crap, but just didn’t sound as good as it deserved to, when there was so much stacked up in the queue right behind it.

The concept of listening to whole albums became unworkable. I missed the old way of giving a record time to grow on you. Giving it time to unfold and reveal itself to you as a thing of relevance and depth, sometimes beauty (in a way i imagine the creators kind of had in mind). Hell i even think it may have helped to have invested some cash in the music to get proceedings underway! At least spending a tenner on the album motivated me to LISTEN and to listen properly, repeatedly.

This ‘snacking fatigue’ is the hidden downside in total music services and it may well be a more significant problem in the long run than compatibility and price. It’s these factors combined that result in the heavy churn rates for music subscription services (note snacking fatigue doesn’t have the same impact for movies, games or sports).

But will snacking fatigue weaken a proposition like Comes With Music? Not necessarily. For starters, by wrapping the music within the life-cycle of the device, Nokia has cleverly minimised churn at least within the first 12 months.

Beyond that, it’s really all about the audience. Nokia has thought this one through as well. CWM is squarely aimed at a younger music & phone fan, who probably file-shares regularly even though they can well afford to obtain a cool device. To the under 24 tech savvy multi-tasking brigade, music just isn’t what it used to be and they just don’t care. Music is a song-led snack, a soundtrack, a backdrop. It’s also sometimes used as social glue - it’s an APP for goodness sake.

A shame but there you have it. The key question is this: as a business, would we (the collective music industry) rather have £50 for everything, than £0 for nothing. The answer isn’t straightforward because it doesn’t fit well with the current supply model.

I think it’s worth a try, because it might be the beginning of something – and that something is a new, legal relationship with the under 24 year old modern music fan. The ones we’ve largely lost.
This brings questions for Nokia which go beyond the obvious ones raised so far. How does Nokia plan to gather & use consumption data to understand the CWM customer base? Will it share the data? How can it quickly segment those users with higher value potential and offer added-value services to keep them? What suite of added-value services will CWM develop? No doubt these are areas in which mobile network operators feel they could play a part.

We’ve recently witnessed another small success in one area of the uncomfortable marriage between music and technology - once again courtesy of Apple. The popularity of music related applications such as Shazam and Pandora for iPhone, demonstrate where we are headed. As with ringtones, it may well be that applications built to make music more fun on platforms like phones is where the future value is for tech-friendly audiences – play-listing, quizzes, rock family trees, games, re-mixing etc. And these apps work best when the music is just there, not a transaction away.

And for us real music fans, the old guard (note, plenty of under 24s fit into this category as well)? CWM just isn’t for us is it? The limitations are off-putting, but so is the snack fatigue. So is the sound quality of file playback on the phone. Nothing about it is for us just yet. Whether Nokia, and other new providers ushering in music ubiquity want to change that, is up to them.

This does mean that for the time being the industry can relax about one thing – cannibalisation. CWM, in its current form, won’t cannibalise music sales. It just won’t. Recent data from TNS ‘suggests’ that users of total music services in the UK might download 2.1 billion songs a year. Whatever this curious data point actually means (what possible value does a stat like that add?) it’s mildly interesting and encouraging that enough people are interested in the total music concept at all and that many of these are frequent file-sharers. But, for reasons discussed here, the impact on the business in the first few years is unlikely to be anything spectacular (see Jupiter's more sobering but realistic analysis on Mark Mulligan's blog).

This is the start of a new relationship with a large group of important music consumers. It’s how we manage that relationship over the next few years that will matter most.

Shifting the needle on new digital music services

This is the second post on new fit for purpose digital business. Following the previous post on music companies this one focuses on digital service providers.

It seems that in recent weeks, there has been a real rush-on in the digital retail space for music. We’ve had announcements from Nokia that Comes With Music is indeed coming soon, with Sony Ericsson pitching in with its own version of the ‘total music’ bundle – PlayNow plus (you can read a nice summary of differences between the two propositions on Mark Mulligan’s blog). We’ve had DRM dropped, Amazon moving into the space and the ongoing saga that is MySpace music now finally emerging with some real news.

In the UK We’ve had a recent announcement from Sky about its forthcoming SkyTunes music subscription bundle, with rival Virgin Media pitching in that it too has plans for a new music service – at least a music portal anyway. Also in the UK we’ve had our much beloved Aunty Beeb (well okay, her ambitious ruthless younger brother, Uncle Worldwide) planning its own branded and ad-funded music streaming service next year, tapping into The Corporation’s vast audio and audio-visual archive. And Amazon said to be launching before the year is out.

It’s enough to leave one breathless really – it’ll certainly hot up the air at the various forthcoming music conferences. My suggested subject for these events might be this:

Is the Digital Music Business Finally Bigger than the Digital Music Conference Business?

2009 is going to be an exciting time of it for digital music that’s for sure. One thing is niggling me about all this though – will this latest flurry of activity on the supply side really shift the needle for the demand for legal digital music? After all, we’ve seen supply-side digital surges before. IFPI’s digital reports (excellent resource if i say so myself as one of the founding authors!) show the high-level indicators each year...

Back in 2003 there were 50 legal music services worldwide, with retail revenues for digital just $20m. This exploded to over 500 services and $2.9billion by the end of 2007. But are those impressive statistics really? Online downloads made up just 48% of those revenues (with mobile – mostly ringtones – making up 47%, and subscription revenues a tiny 5%). With iTunes making up a minimum of 70% of online digital, it leaves only crumb-like revenues to go around the other multi-hundred digital music providers. And we know the profit margins are wafer thin. We’ve seen big brands like Virgin and HMV suffer digitally, while MP3 pioneers like Wippit have died a painful, slow death. As for new big digital brands – only iTunes and possibly eMusic, can be described as successful.

In short, digital music is a difficult market to trade in. And yet look at who we have coming to market!

So what is it that Nokia, Sky, Amazon et al think they can bring to the market that isn’t there already? It’s a searching question when you think about it. It’s not the ability to download single songs from a deep catalogue. It’s not DRM-free. It’s not the ability to sample-stream full tracks. It’s not a more ‘indie’ or long tail catalogue. It’s not music community. All those service elements are well provided for already. So what’s the answer? I’m not sure that these big brands are totally clear themselves.

They each have an angle of course. Sky – an ISP as well as entertainment network – can reach a family market via multiple platforms and is a master of the subscription model. Nokia has, for the time being, a 35% share of the global handset market and knows it must move into the services business. And Amazon has online retail licked. So how do these competitive advantages lend themselves to unique or compelling music services?

There are some fundamental service elements still to play with – price, product and customer experience are still up for grabs in developing something a bit special. But with labels gatekeeping price and savvy service providers unwilling to subsidise music, i think price can almost be ruled out as a differentiator.

This leaves product and customer experience as the two major drivers for breakthrough music services and i think both can be leveraged far more than they have been so far. Firstly, product. It’s silly that we are having debates about albums vs. single songs in a market where the value of both is being steadily commoditised. Kid Rock & Estelle’s non iTunes experiments are fairly meaningless in this context. A service provider that can offer a wider range of music products from one artist or in certain genres, in more interesting bundle packages, will attract interest from paying music audiences as well as file-sharers looking to upgrade a bit on what they can get for their favourite bands.

There are plenty of product elements in the mix to play with other than songs & albums. Video, session tracks, live footage, tickets, merchandise, games, information and editorial offer a plethora of ways a music service can be packaged, presented and sold to consumers, particularly if exclusivity, artist engagement and higher quality thresholds can be achieved as well. There’s no way around it – for a service provider to move the needle with something really special, it will need to get into the content development business – licensing exclusive windows and possibly commissioning exclusives directly from artists. This is very common in TV & film. Comcast, HBO, Channel 4 and the BBC all integrate backwards into production. It takes investment and risk and is expensive, but it’s done with a deeper knowledge of what consumers want than ‘pure-play’ producers, as Comcast demonstrated with its drive to create free VoD services.

Secondly, customer experience. It’s no secret there are major gaps here. Legal music services are still predominantly search based, song-album based and very much push marketed. iTunes has dragged its heals here – taking ages to offer Cover Flow, Mini Store, Complete My Album and now finally, Genius. Nonetheless, Apple shows how customer experience is based on learning by doing, and doing well. Meanwhile eMusic has had some success through focus on editorial and DRM-free.

With recommendation technologies improving by the minute, new open application platforms to drive major improvements in navigation (iPhone Snow Patrol app.) and great editorial brands to link up with (Sony Ericsson& Q), we are getting closer to truly personalised music services, slowly but surely. But it takes research, programming expertise and passion to leverage these resources to offer exciting music services to targeted customer bases.

It’s these elements new market entrants should focus on – not as an ad-on to the basic offer of a DRM-free song catalogue for cheap – but as fundamental to the music offer to consumers who want a better digital music experience and will pay for that pleasure.

Knowing your Elbow from your arse – a small lesson in artist development

Heartfelt congratulations to Elbow on taking the Mercury prize last week. I predicted it (i really did, ask my wife or hairdresser!) and was rooting for them (my very first choice would have been Merz, but he wasn’t nominated so never mind).

I say heartfelt ‘cos i really mean it. I love Elbow. Absolutely adore them. And i’m delighted to see a band reach a new career high (and maybe, just maybe, a breakthrough into the mainstream for a while) after 18 years on the slow burner.

I have a history with this band. I bought their first album Asleep In The Back when it came out in 2001, on the back of good reviews. It didn’t work for me so, i passed it on to a friend and forgot about Elbow. What brought me back to them four years on, was a strong recommendation from Eamonn Forde (friend, music writer & general man of impeccable music tastes) to try Leaders Of The Free World. I duly did, and liked it a lot – enough to buy tickets to see the band play at The Astoria. And that was that - hooked for life. From the moment the singer ambled on to the stage with nothing less than a Styrofoam cup (tea, coffee?) in hand, you could tell something was different about them. They played an absolute stormer that night. I remember saying to my friend afterward that they really should be playing stadiums along with Coldplay (if it wasn’t for the way they looked perhaps, as well as having a more complex, edgier repertoire). After that it was back to the second album Cast Of Thousands – very good (with the track “Switching Off” literally one of the most breathtaking pop ballads i’ve ever heard).

It was after that show, shortly after the release of “Leaders”, i was curious as to Elbow’s commercial curve and pulled their album sales from the UK Chart. Not a good picture at all. Steadily downward from album one in fact, despite a clear artistic improvement and consistently high critical response (see the chart courtesy of the UK Chart Co. and http://www.metacritic.com/).

The band were in that classic space so many bands have been before – getting better and better but selling less and less – in the hole basically. And when in the hole, it’s hard for band, manager or label (if the label still cares) to see a way out. Any cold hard (and blind) analysis by a label accountant would suggest one solution: DROP. Beyond such a myopic view, one can only look forward and hope something breaks for a band in that position. Whether it be getting a song in an ad or TV show, an endorsement from a DJ – whatever – but something.

That something for Elbow seems to me to be their new label. And here is where the business of the labels is so much maligned and under-appreciated – artist development. I know from speaking with the people involved that Fiction worked hard to get Elbow out of its deal with V2 and on to Fiction, for almost a year. Ironically in the end, Universal, which owns Fiction, bought V2 wholly and so could have signed the band by default. That deal does now mean of course that Universal now has Elbow’s catalogue, which suddenly looks like a very shrewd move.

So what happened differently for Elbow under Fiction?

It wasn’t the music. The band worked on the Seldom Seen Kid album (2 years in the making) entirely on their own – both recording and producing. However, from the moment the band signed with Fiction, what they now had was the unwavering support of that label’s founder Jim Chancellor, who believed in the band fully and dedicated the label efforts to getting Elbow’s music to the wider audience it deserved.

The other major difference for Elbow this time around was marketing power (maybe promotional clout is more accurate). Seeing giant posters all over London and full page newspaper ads for the Seldom Seen Kid was a surprise if a delightful one.

The band has worked hard as well. Elbow effectively toured the album continuously with a UK tour on release and appearances on the festival circuit throughout the summer (including one very special night during Massive Attack’s Meltdown, an unusual one off show at Delamere Forest and most significantly, a show-stealing sundown set at Glastonbury). Another round of shows starts with 3 nights at The Roundhouse next month.

But the critical thing is how varied and sustained the campaign around the album has been. In Jim Chancellor’s words the campaign was designed not just to promote the album but to “grow the record over six to 12 months”. A campaign of well chosen media placements (anyone interested in the inspiring music behind the BBC Olympics coverage would have discovered the song “One Day Like This” an SSK highlight) has culminated in the shot-in-the-arm Mercury nomination – with the band doing the rest.

All of which adds up to two insights of value to the business and those who observe and commentate upon it. First, the band would not have achieved this on its own. No way. We sadly don’t live in a world where good music rises miraculously to the top on its own merits - it needs the work.

Second, artist development drives how the business works. Belief in the best artist projects is often – as in this case - contrary to hard metrics or measures. However, a belief-driven campaign for an album like this one also works at its best when there exists a creative and cultural context (the alternative being blind belief which is plain foolhardy).

In Elbow’s case the context was all there: a very good and improving songwriting band; a brilliant (but grounded) frontman - a true auteur indeed; a very good song catalogue; a loyal if small, core following and a consistently brilliant live repertoire.

Most of all, perhaps, a band making sophisticated, emotive music with a very strong potential to connect. A band craving a wider audience if ever there was one. In the opening track on The Seldom Seen Kid, the wonderful “Starlings”, Guy Garvey sings the line:

“I guess this means i’m asking you to back a horse that’s good for glue, if nothing else”.

In backing Elbow it suddenly looks like this horse will be good for much more than glue. Glance back at the chart to see the effect post 1 week on from the Mercury's, with unit sales of 20k taking SSK to sales of 153k - now easily the bands best-selling record and back in the album charts at number 7 this week (from 61 last week). On the way to Platinum? Just maybe.

Footnote: If Guy Garvey writes a more entertaining line than “Charging around with a juggernaut brow”* I might have to change the title of this blog.

*The line is from the track “The Bones of You” from The seldom Seen Kid and is a song about looking five years back from a stressed life “cramming commitments like cats in a sack” to a more carefree time when one could oversleep to the point only when the head of your sleeping partner starts to deaden the feeling in your arm. As poetry in song it’s simply divine – there is no better lyricist in pop right now than Garvey.

Surviving Majors: How to Keep the Dream Factory a Dream Factory

“I got a job washing cars…across from the high rise building where PolyGram Records was. I would stand there with the hose in my hand and look up at the building with reverence, like it was a monument”.
Mark Oliver Everett (Eels) “Things The Grandchildren Should Know”, Little, Brown publishing, 2008.

This quote encompasses everything about the romance of the record companies as they were until very recently - dream factories, star making machines – institutions with a glam factor matched only by the movie studios or the plushest ad agencies. These days they are barely recognisable as such and are gradually becoming monuments of a bygone era. The irony is that Majors are the ones with the resources to affect a real shift in landscape and achieve market tipping points in their favour, yet they are so encumbered by existing systems, contracts, relationships and skills, it’s questionable whether or not they can transform successfully.

I can hardly write an opus here on a blog to suggest how every aspect of a major label can be transformed and it would be pointless anyhow, since writing is so much easier than doing. But based on my study of the majors while at IFPI and more direct experience of working within a transforming EMI, i can at least make a shortlist of areas in which i think, music companies can focus to achieve successful transformation.

I suggest three focal points as a way to begin to turn things around, but essentially, the name of the game is Content Development. There’s a lot more besides of course, but it has to start and end there. It’s also about Creating Culture – much more significant than ‘creating communities’, since communities follow culture. It’s certainly not about being a ‘record company’ – that model can only exist in the medium term for the most A&R savvy, cost conscious indies. The majors must very quickly, really shift (i.e. not just claim to be shifting) to being artist-centred, production and marketing companies.

My three points on which to focus the transformation are:

1. Shift from a products business to an artist business. Walking around the HQ of a major it can be a shock to see that the CD is still the core business – CDs (in some cases CD singles!) stacked everywhere in exec offices and staffers desks tell a graphic story – a travesty of wasted plastic. A visionary artist would be concerned about this. A visionary business leader would now simply ban CDs in the office (physical products of course still exist, but those are for fans, increasingly made-to-order, too valuable for freebies). Basically, the artist is now the brand and everything they create is part of the product portfolio for wide exploitation and revenue sharing. To think of the products as simply the recordings is limited and a ticket to continued slow decline. It’s the Marvel moment – when the iconic comic book company recognised that its core product wasn’t comics but the characters themselves.

2. Shift from an album producing business to a production company built around artist projects. Artists should no longer be stuck on a two-year album-to-album treadmill. Through working with a visionary company, they will create projects periodically whenever it makes sense, depending on profile and preference. Every tour would then be an opportunity to showcase new material and work better synergies between recording and live performance. Artist projects can be wider than just music. If Robbie Williams wants to make a documentary about UFOs or retro gaming, there is a market for that and EMI could be producing this content rather than letting others. The mandate here is to turn the promotional model on its head - to commercialise content based on live, pre-release and exclusives - and to widen and deepen audience relationships through improving content and making it bespoke for platforms and brands.

3. Shift from a promotions business to a marketing business focused on high value audiences. Radio plugging, advertising, securing a TV slot, tour support...the list of promotional activity around ‘working an album’ is a long hard slog. And arguably none of it can really be called marketing. Do these cyclical tasks really deepen the relationship between the artist and their fanbase, or broaden that fanbase significantly? Few of these activities collect any customer information or sense changes in consumer habits. Many artists are already cynical about the promotional treadmill already and will only become more so as all this activity promotes nothing much more than ever-decaying album sales. A visionary content company now needs to be brave enough to take all this activity and stop doing (some, not all of) it in the name of album promotion. Meanwhile, with production values at the core, music companies need to increase the quality of artist sessions, interviews, documentary footage and all else – and package this material for sale, license, or at the very least, direct marketing to the fan base or genre base for the artist. A move to bespoke marketing plans (increasingly digitally-led), for each artist rather than a throw it all at the wall and see what sticks model must prevail.

These would be my three main areas of focus. I deliberately don’t choose a focus on shifting from production to distribution - why take that risk when the distribution business is so fast-moving and over-crowded? I deliberately don’t choose a move away from content to technology – why fumble about in areas outside your core expertise? And i don’t think the model of advances needs such a radical rethink either (though advances do need to come down). The way the relationship is funded should make no real difference to overall revenue and profit outcomes really.

Obviously these shifts do mean that label-artist contracts must change to the sharing of the full portfolio of IP rights, there is no way around the need for this. There is also no way around the need for better creative decisions in A&R, since this model requires smarter investments in a smaller portfolio of artists (with digital, the tricks & tools for reducing A&R risk are now springing up everywhere and can be used far more systematically).

Organisationally there are obvious shifts required in culture, ethos and skill. In all content companies, ‘suits’ and ‘creatives’ sit alongside each other in a fragile juxtapose. Investments in skills should focus around filling this ‘white space’. It takes creativity – both commercial and artistic creativity – to do this. And a new relationship with artists based on transparency, trust, understanding and a shared vision. Artists would come to a new label for this, knowing that this is the environment in which they can achieve their best work and find the widest audience that deserves to see & hear it. That is the new dream factory model – to do great work and be rewarded for it with the widest most loyal audience your music company can find for you both.

Music Business 2012: An Alternative Market Forecast Courtesy of David Bowie

“It’s the beginning of nothing.
“And nothing has changed.
“Everything has changed”

So say a few profound lines of the lesser known, but excellent, Bowie song ‘Sunday’ (from the ‘Heathen’ album). Listening to this song recently got me thinking about the whole music space once again (note to self, I should really stop doing this). Just for the pure fun of it, let’s use Bowie’s lyrics to de-construct & re-build the entire music business in an alternative forecast.

First, “It’s the beginning of nothing”...

Majors are wrestling with the angels, technology upstarts with silver bullets (there aren’t any) proliferate, Live Nation is vexing everyone by signing big “360” deals (still, for now). Publicity stunts over how new albums are released just get more & more ridiculous with honesty box payment options, free songs and now whole albums down to 49p. Ultimately this is of course assisting music’s destiny towards being free (according to economists & futurologists on the web anyhow). Meanwhile industry bodies seemingly make late headway with solutions over file-sharing (though according to said economists and futurologists, none of it now matters that much, sadly). Hell in a handcart we go then, but hang on...

“And nothing has changed”...

Come again? We know that music consumption habits have transformed for good. Access to music is ubiquitous & largely free, when it used to be scarce and fiercely ‘gate-kept’ for sale only and even then at our risk since we couldn’t even listen first. No one’s bothered about keeping a music collection now, because a) music is too plentiful to make sense to own b) the music had DRM on it when we bought it and we’ve lost it since in a hard-drive crash or c) it didn’t have DRM on it, because we got it free from somewhere so who cares, or d) it’s still free on the web somewhere, so if we did want to get it back, we could, but probably won’t as a) universally applies.

But the majority of music consumers still hear about music first on the radio, still buy albums in HMV or on Amazon and very occasionally, actually take time to listen to recorded songs – usually while on the move or doing something else. Just like we always did.
So has anything really changed? Of course, but so-called radical shifts in music demand patterns have happened so gradually as to give the supply side plenty of time to regroup, assess, experiment, and transform. After nearly ten years of this, the industry that brings us all our music has changed beyond all recognition, right? Right?

We all know that the value chain which brings us music is totally broken and the only valid economic route is for artists to go ‘DIY’. Some people out there are positively praying that this is true because they hate the incumbent music industry institutions so much.

But hang on though. No major has gone under, yet. Some recently announced increased revenues, profits or both, and most have been making various strategic acquisitions. And most still sign new bands week in, week out. As for superstar artists, look at Coldplay – how huge are they? Digitally, physically, live, every which way, huge (and their album is actually quite good so people want to hear it, buy it, own it and even keep it). Meanwhile many indie labels are doing really quite nicely thanks very much, operating pretty much as they’ve always done.
So yep, nothing rally has changed, enough. Right?

Wrong - “Everything has changed”...
All the fundamental, tectonic plates have shifted – no doubt about it. We are now just waiting for a series of little shocks to happen that will really shake, rattle & roll (sorry) the foundations of the business of music. And we all know now how this happens now thanks to Malcolm Gladwell – tipping points.

If I was making forecasts, which I’m not, I would do so by applying tipping point theory. I’m no futurologist, mind. Then again, I’ll bet you some change that one or two or maybe even three of the following tipping points will happen over the next 3-4 years. And when they do, especially in combination, everything will change, and quickly.

Here are my five music business tipping points in chronological order (if indeed chronology applies to a forecast). You will probably have a few more of your own to add.

Tipping Point 1: A major global superstar artist goes entirely digital, no more CDs
Ø Mostly likely to: Radiohead
Ø Why: The band already got half way there with In Rainbows. They are free agents commercially and they are digital trailblazers. Eco concerns over CDs
Ø Pioneers: Lots of other bands who don’t matter enough to tip the scales
Ø Impact: A forced shift in consumption habits among those consumers who have yet to go digital for whatever reasons. The band builds a completely effective direct relationship with its massive global fan base. Many major acts will follow suit, even those on label contracts insisting this is the way they want to go
Ø When: 2008. The band will get on & start releasing digital only tracks, EPs & projects more or less straight away

Tipping Point 2: A record label realises that its global direct-to-consumer business is directly more profitable than with music retailers, and subsequently largely dispenses with low margin wholesaling
Ø Most likely to: Nonesuch
Ø Why: This label has cracked the code for a valid future model for selling recorded music – aim firmly at a high value music segment (in this case 35+ discerning music buyers with eclectic, sophisticated tastes) and offer them a simple, good value product conveniently and consistently (digital and physical albums for one price direct from the label site)
Ø Pioneers: Mute tried, Blue Note really should have made it work
Ø Impact: The model will catch on. Topic, ECM, Mute, Domino will all do the same thing with considerable success. It will be attractive to artists who want to join the stable of their respected peers. Majors will get a shift on to make each label in their portfolio take a similar approach, but do to organisational constraints this will take a long time to happen
Ø When: Nonesuch from 2009, other indies from 2010. Majors might get ‘round to it eventually

Tipping Point 3: A new-entrant retailer really shakes up the consumer offer by aggregating the widest possible group of music assets for sale in one place, at amazing prices
Ø Mostly likely to: Amazon
Ø Why: The retailer already sells everything (at amazing prices) and has at least got started with its music offering. This has to be digital to be a profitable model
Ø Pioneers: ShockHound
Ø Impact: Will radically increase the average revenue per music fan of an artist (ARPU), since they can pre-order, pre-pay or subscribe to music, merchandise, tickets and a whole menagerie of exclusives
Ø When: from 2010, unless Amazon gets fed up with the complexities and bails on music

Tipping Point 4: A major label gets multi-right portfolios (previously known as 360 degree deals) working effectively as a standard model
Ø Most likely to: Universal
Ø Why: Combination of savvy, market power and momentum. Universal is busily acquiring the capabilities to both create and (critically) service multi-right contracts, with recent forays into management and merchandising through acquisitions of Sanctuary and others. If not through ownership, Universal’s market power will achieve this through partnerships with service companies in other industry sectors
Ø Pioneers: EMI, Live Nation, Nettwork
Ø Impact: The major label/‘music company’/’Dream Factory’ finds a way to survive, effectively sweeping aside all notions of disintermediation. Sony Music Entertainment could follow, Warner & EMI less certain
Ø When: From 2010

Tipping Point 5: ‘Total Music’ takes hold
Ø Most likely to: iTunes
Ø Why: Consistently innovative around consumer convenience, ease of use, style
Ø Pioneers: Nokia Comes With Music, SkyTunes
Ø Impact: Not as great as current thinking would suggest. Even though a large swathe of consumers will subscribe, there will be plenty of other consumptions models. Debates about music through ISP’s at last swept aside by those services with strong brand equity and service provision experience in music
Ø When: From 2011

Overall forecast by 2012 – generally positive but with plenty of casualties along the way.

All derived from one of Bowie’s bleakest, most depressing songs.

The Concept Album is back - not before time

Here’s my favourite music industry stat – the number of albums released in the UK (2007): 32,459. Unbelievable. What other consumer business puts over 30,000 separate branded products on the shelves in a single year in the hope of making a return on each one? As industry sales decline, the number of commercial release has actually increased over the past five years by 30%.

This is commercially released albums only. If we add the one zillion unsigned bands on MySpace who also have song collections on CD-R & websites, it’s easy to conclude that there is currently far too much music for us listeners to get our ears around. And so all labels and artists face the same conundrum with each release – how to get ‘cut through’.

Many releases these days strive for cut through with increasingly elaborate publicity stunts around distribution – honesty box payments, 49 pence albums, cut & paste your own album from these 30+ average songs, free songs or albums and most boring of all ‘mix your own songs from ‘stems’’ (god help us all). Here’s my advice – get cut through with the music itself. Make music about your obsessions, passions or interests (a Robbie remake of War of the Worlds perhaps? – i’d be interested). Here are a few excellent examples of the genre...

I never thought i would ever bother with a Mick Hucknall record, but having heard about it (and seeing a show-stealing performance by Hucknall on Later With Jools Holland) i was intrigued to hear his latest – ‘Tribute to Bobby’. It’s what it says on the cover – a tribute album, to Bobby Bland. I’d never heard of BB and don’t particularly like American Blues, but the story behind the project, along with Mick’s performance of ‘Farther Up The Road’ had me intrigued. It’s really not bad at all. It’s introduced me to a new genre for which i’m always grateful. And its touching that on the sleevenotes (wonderful these records lend themselves to this old fashioned but great concept), Hucknall himself concludes “I’m taking a big step and going to disband Simply Red...after recording these songs, I don’t see going back to that style...This is the beginning for me”. Side benefits to society have come from this project as well.

Other recent music projects of note include the Mercury Nominated “Stainless Style” by Neon Neon. It’s a concept album about John DeLorean - the man and the car. It’s a cracker 80s retro pop album that has everything except decent sleevenotes explaining the concept.

But the master of the genre has to be Ry Cooder. He has recently released the third album in his trilogy of lost American folklore (how’s that for a theme). This began six years back with Chavez Ravine (my favourite album of 2005), which focused on the demise of a Mexican suburb of LA in the 50s. It continued with 2007’s “My Name Is Buddy” about a travelling cat (the pet kind)called Buddy in the heavily political backdrop of 30s Depression Era mid-west America. Both excellent, fascinating records.

The third final instalment is I, Flathead, subtitled ‘The Songs of Kash Buk and the Klowns’, a fictional (only it’s so authentic it seems real) blues band with a penchant for salt flats speed racing. The album special edition comes with a 100 page Novella telling the story of same (£13, absolute bargain). It’s wonderful stuff. All albums in the trilogy are released on Nonesuch, my favourite record label – of which more detailed posts later.

Personally i have an ongoing problem getting through my ‘music pending’ pile, which just gets bigger & bigger each week and ends up with albums being pruned from the pile before i’ve had a chance to actually hear them. There are certain records though, that stay there until i’m damn well ready to give them a proper listen – and these often share a characteristic - they have a story i’m interested in.

Themed records often go way beyond mere concept albums in that they have a whole backstory to them, which lends itself to great cover art, ‘label copy’ and even a whole range of supporting products (books, documentary films etc.). These records can be musical odysseys’, essentially, and much more entertaining for it.