Mobile may be the best way to sell digital music

12 February 2009 | By Jessica Sandin

The lack of talk about the recession was the most refreshing aspect of Midemnet, the digital-focused weekend sessions that kick off music industry tradeshow Midem. Music execs may cheerily remark that the simple reason is the music business has been in recession for years already. But music, of course, isn’t dying. It’s the head-in-the-sand mentality of the industry establishment that has to expire. Amazingly, even after years with the writing on the wall — massive online piracy, CD sales diving — it still hasn’t gone completely. In spite of everything, physical sales remain a big chunk of revenues for labels, so the old guard can cling on.

Digital music, meanwhile, isn’t making up the slack. Industry body the IFPI maintains that only 5% of online downloads are legal. Money is moving to live music and merchandising, leaving a chunk of the potential for making revenue on the digital side in the hands of mobile. Actually selling music over mobile remains a hard nut to crack financially, as the inflexibility of the labels’ business model often remains unless big wads of cash are on the table. But something’s starting to move at the other end as users begin to go beyond side-loading.

The likes of Pandora and Last.fm are getting some mobile traction. Swedish streaming music service Spotify, the darling of the moment, is also expected to go mobile, having appointed a head of portable. Streaming music services are working well via apps on the iPhone and Android. RIM is also expecting music applications to help drive its forthcoming BlackBerry app store. Clearly it’s trying to challenge the iPhone’s music credentials, luring developers with a better revenue share.

Some music apps take advantage of mobile features. One of my colleagues is a fan of TuneWiki, an app which shows you where fellow users are and what they’re listening to. It’s a new way to discover music or feed the more basic desire of laughing at the taste of your peers.

But the relationship between mobile and music stretches far beyond the music itself. The upload capabilities of current devices are a boon to the increasing need for acts to strengthen and monetise links with fans, a topic that was the centre of Midemnet to such an extent that it became repetitive. One panellist made a point about the demands this makes on artists beyond being good at what they do. But ‘manufactured’ stars with significant emphasis on qualities other than musical ability is far from a new concept. A natural ability to play the game, be that by communicating with fans or bewitching journalists, has always given musicians extra fuel on the road to stardom.

Following use by a range of individual artists, both Universal Music and Sony Music have struck deals with Kyte, the digital content distribution platform provider and another Midemnet darling. Backed by both Nokia and Telefonica, Kyte makes it easy for talent to reach out to fans. You can upload or stream video through your mobile while fans can access the content through either PCs or mobiles if they can stomach the data charges. The trick is that the originator stays in control of the content and its monetisation. It’s not surprising the big labels want a piece of that action.