Fast Company

MIDEM 2009 - Setting Music Free

Guest Column: MIDEM 2009 - Setting Music Free Authored by Hal Bringman on January 22, 2009 - 12:54pm. As Digital Media Wire readers ready themselves for the highly anticipated Digital Music Forum East, here’s an overview of the annual MIDEM music conference that just concluded in Cannes, France. The annual music industry happening, MIDEM, is a must attend event for global players in the music business. This year’s MIDEM attendees were welcomed by moody skies over Cannes, which were symbolic of the state of the industry overall. Along La Croisette, rain pelted delegates darting from the Palais de Festivals to the deal making hubs of the Majestic and Carlton hotel bars. The gloom, however, wasn’t reserved for the weather outside, but made its presence known throughout MIDEM and MIDEMNet, whose combined attendance was down 12% hovering around 8,000 delegates, due largely to global economic woes, and perhaps more poignantly, to empirical evidence of a fundamental and permanent shift in the music business. For instance, attendance by physical distribution companies, CD manufacturers and record labels was down, according to MIDEM director Dominique Leguern who added, "It's not a music industry crisis, it's a CD crisis."

Leguern said they would consider amalgamating MIDEM with its digital music sister event MidemNet at future conferences as the industry evolves into a fully digital domain. Leguern said there were many positives from the conference, however, which also saw 300 artists play live and attracted delegates from over 80 countries. "The industry as a whole has turned a page," said Leguern. "It accepts the CD era is decreasing fast and new revenues will come from other business models. Some of the old issues like DRM are over so we can move into a new era."

Indeed, much of the mind numbing rhetoric and head-in-the-sand anti-digital posturing was absent this year as companies exchanged optimistic ideas about how to move the industry forward from a product based business to a service oriented one. “One thing I would change in the music business is a mindset. It's about being optimistic about the opportunities we have in front of us. We have to accept the principle that a product-based model is under severe stress. There are two primary sets of people in this business that matter - artists and fans - and we should all focus on them. And the Internet gives us a real opportunity to develop long term careers between artists and fans, and that's a huge challenge but a huge opportunity for us all,” said Brian Message, co-manager of Radiohead. Message spearheaded the successful experiment of selling Radiohead’s IN RAINBOWS by allowing fans to pay what they deemed fair for a digital copy before CDs were made available at retail. Reggae singer/songwriter, producer and promoter Bohbi FM added, “If I could change something in the music industry, it would be to invest in new acts. Put the money in unknown artists. Because for the last 20 years, we are hearing the same acts all the time. We need a change.” The increasing impact of brands, advertising, and technology companies at this year's conference were signs of things to come as these sectors shape both the future of MIDEM, specifically, and the music business overall. Also announced at Cannes was a pact between U.K. dance act Groove Armada and global drinks brand Bacardi in an online mechanism that will harness the power of social network sites to distribute the band's new EP.

In addition to being available on traditional download stores on March 2, the new EP will be launched via an online sharing service, www.bliveshare.com. Users who are over the legal drinking age sign up and get to download the first track in MP3 format for free, then to get track two they have to share track one with 20 people, either by emailing directly or using a Facebook app or widget embedded on other social networks. Andy Cato from Groove Armada commented, "Over the last few years, a lot of music has become free, and while there will be an on-going market in recorded music for a while, the wave of free music is overwhelming. "We wanted to find a way of embracing the fact there is free music out there -- but giving it value again." Rapper Kanye West’s blog was a hot topic at MIDEM. Embracing the 1:1 relationship possible between fans and an artist, he was described as one of the most effective communicators with his fans, during a panel discussion at the MIDEMNet conference. The "Serving Artists, Serving Fans" discussion focused on generating value and revenue streams from the relationship between fans and artists. Bryan Calhoun, VP of new media and external affairs at Sound Exchange, is a consultant to Kanye West and says the rapper is "very active with communicating with his fans" on his blog and sometime posts seven or eight times a day. His music recommendations on the site have made him something of a tastemaker, or "curator for what is cool," Calhoun commented. "It's definitely him," Calhoun added, referring to the entries atwww.kanyeuniversecity.com/blog. "It's totally authentic. You can't pay to put things on there -- people have tried." The "significant amount of traffic" to the blog also means it makes money from advertising, Calhoun added. Announcements to fans are specifically from West, never attributed to his label, which Calhoun said is crucial in personalizing the service and making the connection. He stressed that West is "very particular" about the messaging and there is complete control over his online activity at the blog and other platforms. Other advertising exploits, aimed at making music ‘feel free’ to consumers, included Coca-Cola and Warner Music partnering on a download release as part of the brand's new "Open Happiness" global marketing campaign.

The track, titled "Open Happiness," was announced during the "Exploring New Models For Brands and Music Partnerships" panel. Umut Ozaydinli, music marketing manager for Coca-Cola's Worldwide Sports and Entertainment Marketing division, said the track would be marketed via billions of cans of Coke. Artist Jill Sobule chronicled her fan-financed album, which aimed at raising $90,000.00 to cover the costs of making a new album, and was readily achieved. One fan even donated $10,000.00 individually, which was rewarded with a guest vocal spot on one of the recordings. Tom Bywater, CEO and Founder of Power Amp Music, which supplies financing to artists, said, “Investments in established artists make sense in any economic climate, because music is part of our cultural DNA and it will never go away, no matter how people consume it changes. The recorded music business has suffered in recent years from the decline of CD sales. However, live music, merchandising, music publishing and other income streams, such as sponsorship, and branding have all grown steadily and more than offset the decline in revenue from CD sales.” Mike Masnick from TechDirt pointed to the session on how the Chinese music model had evolved. Almost no one buys music there, but it's still a huge moneymaker for musicians. JY Park, President & Artist, JYP Entertainment, had mentioned this in his presentation -- his musicians make a ton of money from brand sponsorships in China -- but there were numerous other examples of musicians in China making plenty of money through mobile subscription services. For example, some musicians get fans to sign up for special subscriptions that represent the only way for them to potentially get tickets to see those acts perform live. In advance of MIDEM, Omnifone and Gracenote announced a partnership that resonates this particular approach.

The combined technologies of Gracenote and Omnifone provide consumers with a personalized, holistic music experience delivering immediate and unlimited access to millions of music tracks, and the freedom to download, make playlists, get recommendations, play music wherever they are, whenever they want, on any device they choose. For example, users can create a comprehensive Beyonce playlist at home on their PC using a combination of their own collection and the unlimited music service, and start playing it in their living room. Then, get in their car, and have it pick up where they left off. Later, when they are at a club, they can search for music they are looking for, then download it and have it synched to all of their devices, and get recommendations for other music they might like based on genre or user generated recommendations. On each device, the most appropriate file format and user interface is presented to ensure the best possible user experience for that environment. Jupiter Research forecast says U.S. digital music sales will grow by 17 percent per year on average over the next five years to make up 41 percent of sales by 2013, while Juniper Research predicts the success of unlimited music services on mobile platforms will significantly grow digital music revenues, with subscription-based unlimited digital music services overtaking “first generation” pay-per-track services and worth U.S. $3.3 billion by 2012. “Omnifone’s partnership with Gracenote will make connected unlimited music services a reality in the living room, in the car, on mobile devices, and computers; everywhere we go our music collections, playlists, and recommendations will follow seamlessly, automatically and without wires. Historically, unlimited music service providers have focused on mobile and PC platforms, but consumers want access to music in the living room and the car, as much as the mobile and desktop computer,” said Rob Lewis, CEO of Omnifone. “This announcement means music lovers will soon have the freedom to access and consume unlimited music legally, across a wide range of device platforms, with the most appropriate user interface and file format for each device, synchronized automatically rather than having to side-load, back-up or rip compact discs.” “Making the Emerging Markets accountable is the key for the future of the Global Music Industry. As the old players helped destroy the business in China and Russia by selling for too little than they could afford in order to be able to pay their artists the royalties they had agreed to, they will not be the ones that can be trusted with building New Markets. It is clear that the consumer will pay for bandwidth and amount of traffic, and that this money will be handed over to the traffic drivers like artists, tv, film studios etc. The East will be first with this as they don’t have to fight existing players who protect old models. And then the rest will follow once they have seen how much sense it all makes, ” says Thomas Reemer, CEO, cugate.com. One thing that is constant is change. We can only hope the optimism and experimental mindset reflected at MIDEM continues throughout the year and beyond. Perhaps the brightest part of the entire event was sitting in the Sunset Marquis VIP room and watching Barack Obama being sworn in as the 44th President of the United States and celebrating with dance and music. Yes we can! -Hal Bringman About the author: Hal Bringman is a media consultant and founder of NVPR. The company has deep experience in the digital media sector. Long before Steve Jobs ever figured out what an MP3 file was, the firm has been guiding the digital music revolution since launching MP3.com, Napster, and many other major players. The company launched and built many of the biggest or most talked about brands in mobile entertainment and digital media. With offices in Los Angeles and Buenos Aires, the team is prepared to help revamp websites, improve copy or launch global PR/marketing campaigns.

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