On Feb 5th, I entered the Globe Lobby of the Los Angeles Times Building in downtown Los Angeles as the only Caribbean representative at the 2nd annual EconMusic Conference, organized by UK based ContentNext Media. This year’s conference focused on the key strategic issues surrounding the economics of the digital music industry.
By the end of the first panel discussion which featured Courtney Holt (President, Myspace Music), David Ring (EVP, eLabs, Universal Music Group), Cory Ondrejka (SVP, Digital Strategy, EMI Music), Michael Spiegelman (Head of Yahoo! Music) and Chris Stephenson (GM, Global Marketing, Entertainment Business, Microsoft) I had to wonder whether Jamaica and by extension the Caribbean region was ready for the technologically driven strategies that industry players are implementing in order to remain competitive in the global music industry.
MUSIC 2.0?
Technology and music are much more intertwined than ever before and to become or remain competitive in the marketplace, ALL industry players MUST experiment with new technologies, new business models, and take on partnerships with providers of music hardware and software in order to satisfy the call for “ubiquity of music.”
The term “Music 2.0” (coined by Gerd Leonhard) correctly describes the nature of today’s music business, driven by digital, web-based strategies that allow consumers to access, acquire and interact with music in ways not previously available.
NEW BUSINESS MODELS
The Music 2.0 landscape has acted as a category 5 hurricane in the music business because it has allowed for the introduction of new players such as Live Nation (the largest booking agency for live shows in the world) and thousands of independent labels utilizing digital distribution strategies and forcing major labels to revisit their outdated business models.
David Ring from Universal Music Group and EMI executive Cory Ondrejka discussed the relevance of any single business model that could satisfy the needs of artists, labels, publishers and consumer. But the discussion proved that even the members of the “Big 4” (Sony, UMG, WMG and EMI) have no exact answer for a “best business model” and they are unable to predict with any level of certainty what type of model would stabilize the industry and technology in which form would rule supreme.
Major labels at this point have simply preferred to take on a slight experimental approach (allowing themselves just enough wiggle room to hold on to their massive 75% dominance in the music industry). Their only suggestion was that any player in the music industry must try to ADAPT to the dynamic changes.
Are players in the Caribbean ready to adapt? Or will we simply follow the lead of foreign entities and try to make their strategies work in our region and for our music? This may be much more than detrimental than we think.
Fred Croshal founder and CEO of Croshal Entertainment Group (www.croshalgroup.com) and former executive at SonyBMG and Maverick Music was a refreshing addition to the conference introducing his alternative business model, what he calls, the VIRTUAL RECORD LABEL. According to Croshal, who has been involved with the sale of over 100 million albums over his 30 year span in the music business “…the structure of the label gives the artist 100% ownership of their masters and allows for faster reaction time, lower costs and better results for the artist.” Croshal’s label provides the same services an artist would receive at a major label: sales, marketing, song placement, internet, publicity, budget management but there are no costly overheads to recoup. Could this model be the way of the future?
Croshal represents American Idol winner Rubben Studdard, RnB star Yamin Elliot, Jupiter Rising, Jackson Browne and numerous other hugely successful American acts.
Will Jamaican artists continue to look to the “Big 4” for deals when most major acts like Madonna, Janet Jackson, Jay Z, Nickelback, and Bruce Springsteen are moving away from them driven by a desire to actually “own” their music?
MYSPACE MUSIC AHEAD OF THE GAME
Courtney Holt, newly appointed President of Myspace Music and former EVP of Digital Music & Media at MTV Networks, delved into developments at the new arm from Myspace. Privately funded and driven by advertising revenue, and sponsorship, Myspace Music is an expansion of the different ways that members of the Myspace community can interact with artists and discover new music. They have come out ahead of the pack in terms of exploiting the social networking model to expand the reach and popularity of an artist and their music.
Myspace Music has several Jamaican artists listed under their Reggae category but so far none have been a featured artist or offered a deal for “secret shows” such as those received by 23-year-old British artist, Lilly Allen (3 secret shows on 3 continents). According to Holt, these “secret shows” have driven record sales for these artists in the hundreds of thousands. MySpace Music launched the Secret Shows franchise in January 2006 and has since hosted such acts as Rilo Kiley, Moby, Maroon 5, the Killers, the Yeah Yeah Yeahs, Tenacious D, Ice Cube, James Blunt and Neil Diamond in cities around the world.
MOBILE MUSIC DEVELOPMENTS |SUBSCRIPTION SERVICES
Even before XM and Sirius radio entered the market, several companies such as Yahoo! Music and Rhapsody had experimented with subscription offers for music consumers. All that have trekked this road have later on abandoned the idea. When I pressed Chris Stephenson from Microsoft about the need for change in consumer perception as it relates to music as a product, he agreed that there is a need to shift consumer perception from “ownership of music” to “access to music.”
If consumers continue to view music as a product to be physically owned, there will always be resistance to paying a monthly service charge to access music.
TICKETING
In Japan today, music lovers are able to purchase concert tickets directly from their mobile phones. I directed this question to members of the Mobile Music panel: Jeff Annison (Founder & CEO, Underground Labs), Daniel Cohen (VP, Business Development, Dada Entertainment) and Tom Conrad (CTO, Pandora) who all agreed that very soon mobile phone companies in the US will be following suit to possibly partner with event promoters or ticketing agencies such as TicketMaster and Live Nation, as this is a viable option in the market of bringing artists closer to their fanbase.
Jamaica has Island Stubs (www.islandstubs.com) is this a viable option for us as well? Have their executives started negotiations with entities in the mobile arena to possibly provide such a service?
THE DEATH OF THE CD
Currently, Microsoft is heading into a deal with BestBuy to offer preloaded ZUNES based on music that consumers like. Do we foresee any of these ZUNES being preloaded with Reggae/Jamaican/Caribbean music?
At this point the deal is being inked between Microsoft and the major labels, with Universal being a big fan of the idea. This move is a reflection of an effort on the part of record labels to utilize “recommendation technology” and “play catch up” to what other entities like Amazon and iTunes have been doing for years to better understand the needs of consumers. In addition to the massive 45% decline in CD sales since 2000, this ZUNE agreement signals the ever-nearing “death of the CD.”
Is VP Records and local acts who are still thinking of “pressing a CD” ready for this move? What plans does Record Plaza, Music Mart, Derek Harriott, CD Centre, Music Fair, and others have in store for Jamaican music consumers when the CD is out of the picture?
During the conference there was mention of many who stand to benefit from this new dynamism and the falling of old business models but is the Caribbean region technologically ready?
By the end of all the presentations I left the LA Times Building feeling that without the necessary technological infrastructure Jamaica and the Caribbean will most definitely be left behind in the shift to MUSIC 2.0.
If you liked this post, why not Subscribe and get Silicon Caribe Today by Email
It’s not about technical infrastructure. Even with a substantial investment in all that is required there would still be a significant gap regarding our “readiness” to take hold of any opportunity.
Our strength and weakness as Jamaicans is that we don’t care…
We don’t care what other people say or do. We just do what we do the way WE do it…and then insist that we should be paid.
Often times that is the way music is produced in Jamaica and for the most part it is fabulous giving us a sound that is unique though somewhat insular.
Bob Marley and Chris Blackwell seemed to be very aware of the global market and I think that was the reason for their global success.
So until we as Jamaicans start thinking as Global citizens then we will always be playing technological “catch up” to the rest of the world.
February 9th, 2009 at 4:50 pm
Great post Simone.
Damian Marley and Stephen Marley actually did perform a MySpace Secret Show in Miami last year so Caribbean acts have benefitted as well.
As for the virtual label idea, that is exactly what Warner Music Group created in 2006 when it launched Cordless Recordings, a digital label (now being called “NetLabels”).
There is no doubt that the power is shifting from labels to artists and Caribbean artists and small labels can take advantage of technology instead of depending entirely on 1 or 2 labels.
You raise some questions but Seretse hit the nail on the head: The Caribbean is ready from a technology standpoint, the problem is a mental one.
There needs to be more publicity about the new options and real examples of artists and labels making use of them. I recently spoke to a CARIMAC class at UWI Mona about “entrepreneurship in the communications industry” and made sure to talk about these new opportunities and provide examples.
February 9th, 2009 at 5:42 pm
it is interesting you say we don’t care…i am not sure i understand excatly what it is that we don’t care about and who should care….I think it is obvious that we cannot wait on this change on preparedness that simone speaks of to be directed by government it is people in the industry themselves…people have to be willing to see the bigger picture of have a big picture..is that what you mean by not caring as it is now i am sure certain people are benifiting from the industry but the whole idea of music 2.O is the next step which each person in the industry has to be prepared to make the changes to meet, artist managers, artist, producers and promoters
February 9th, 2009 at 6:25 pm
additionally i am doubtful about this Music 2.0 what is it actually and how will it serve us. Is it the big music industry players restructuring the indutsry for us to play by a new set of rules? is this just technology that UNited states and Europe are best able to take advantage of? what was our performance under Music .5 or 1.0? Infrasture is definetly a problem are we able as individuals to recah some of these markets that Music 2.0 offer? is it also a matter of catering to European taste now what type of music does MUsic 2.0 require? i think all of these issues need to address as well when we say Music 2.0 is coming or is here ….we will just be liek headless chickens running around looking at music 2.0 and another question where is the expertise in JA to maximise teh benifits of music 2.0….this is extremely interestly.
February 9th, 2009 at 6:30 pm
Caribbean artists already has the infrastructure for digital music. Most artist release singles and this is what drive tours/show dates. Live Nation understands this and their model is perfect for what the author reference as music 2.0 It is up to the artists/management to maximize the singles market. Serani is an example of this. TPain is an example of this. The Caribbean public will go to a stage show or fete before they purchase a CD.
February 10th, 2009 at 2:33 am
Thanks everyone for taking the time to read this….
Hopefully we can flesh out a way forward….pretty soon
Look out for more writings on this issue and others
February 10th, 2009 at 2:38 am
Orlando
I see what you are saying but….when Lil Wayne gave away his album (and lost milions) and then actually released it for sale and made much more than what he lost…that’s the ultimate of the online model.
Do you think that if Serani gave away his music for free…..he would still be able to see that return?
You say the infrastructure exists but existing and utilizing is a whole different ballgame. I agree with the point made earlier that a lot of it is mental….there is still a significant reliance on the “record deal” to make it big.
Independent labels exist in the Caribbean (several in JA) but they have not really made a dent in the industry simply because they are not trying to utilize (or may not be aware of) the technology available to indies.
Like:
Topspin
Music Sound Load
Sonic Bids
CDBaby
Discrevolt
Celebrity Access
IndieClick
OMG! Live Nation and Ticketmaster have merged!
Have to blog on what that means for artists from the Caribbean!
February 10th, 2009 at 5:16 pm
I thought music 2.0 directly relates to how the music is being distributed and the control Caribbean artists have over their content. I think the Caribbean artist may not have the marketing force with them like a lil wayne either. I went to a living room concert the other day. This was put on by a friend of mines.
The performer was Pat Dinizio of the Smithereens (Old rock group). The living room was filled with about 20 persons. the point here is that I see Music 2.0 as finding creative ways to distribute and keep control of your music while patiently building an audience. All 20 person bought his CD and all 20 person are fans or just became a fan. We will then keep in touch via his website. I don’t think big is always better.
February 11th, 2009 at 8:28 pm
See what you are saying Orlando
but at 20 people an event …”patience” is relative huh? in a world where bands have to continuously reinvent themselves to satisfy the palettes of music lovers by the time Pat builds a sizable fanbase would it have been worth it?
Music 2.0 is on both sides of the gamut…how it is distributed and how it is consumed…. So having said that what percentage of the world’s population still consumes music in the way you described?
Bigger isn’t always better but a Live Nation and TicketMaster merger is an example of just how much control bigger now has and how these mega companies have given artists no choice (if they want to have a successful career). The fanbase relationship is no longer something ignored by labels and companies…they are trying to do the same thing as Pat Dinizio only they have access to more people at any one sitting
February 12th, 2009 at 5:40 am
[...] IS JAMAICA READY FOR MUSIC 2.0? L’industrie de la musique connait une nouvelle aire mais la Jamaïque est elle dans la danse ? [...]
February 13th, 2009 at 4:26 pm
everyday-LOL
March 6th, 2009 at 3:00 am
[...] of years, it looks the same- a hellish mish mash of things stuck on a page hoping the lover of reggae music will tolerate wading through the madness to get to where they want to go. Hope does spring eternal [...]
March 10th, 2009 at 3:48 pm
I love lil wayne too.
March 21st, 2009 at 8:47 pm
Haha ^^ nice, is there a section to follow the RSS feed
March 23rd, 2009 at 3:41 pm