Music industry must be patient with web models

25 February 2010

The music industry is littered with examples of technology and consumer demand overtaking existing business models. Who remembers the Home Taping Is Killing Music skull-and-crossbones campaign?

The notion that music lovers should be able to get their music anytime, anyplace, anywhere (often referred to as the Martini model or the Celestial Jukebox) has been around for the last ten years or more. The main stumbling block has been technology, either narrow over-the-air bandwidth or the limited functionality of devices. These obstacles have now, for the most part, been removed. The question for record labels, publishers and artists is whether they embrace this model and use it to connect with and sell to music lovers, or resist it.

The deserved growth of legitimate music services must be applauded by the music industry. The entrepreneurs and investors behind a service like Spotify enter a very difficult digital music market, where piracy is rife and several companies have failed. As the Government has said, the industry needs to offer its support to the broadest spread of legitimate services and give them a chance to survive and flourish.

This means less focus on the ratio of streaming royalties to ad revenues and more attention on what consumers want. Too often we hear of legitimate services being hampered by licensing difficulties and barriers to entry. Even if streaming services don’t yield the immediate value that labels and publishers demand, they certainly provide a legal alternative for the next generation of music lovers, who aren’t in the habit of paying. Demanding tough licence terms or bleeding legal services dry will ultimately result in less legitimate music.

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