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Tag Archives: Next Generation Artists
It has been a tumultuous few weeks in the Compatible World – a raging debate about file-sharing has got a lot of people very emotional. It’s mostly been in the music world, but all sorts of creators and creatives in different sectors have been watching with breath held trying to see which way this argument goes. There is nothing like a threat of regulation and legislation to sharpen a debate. There is nothing like a recession, loss of jobs and incomes, to make it emotional. After all, file-sharing is at least ten years old now, but this has only served to amplify the arguments.
On the one side, the libertarian argument – on the other, the conservative view – there’s been little middle ground. On the one hand those that argue there is much promotional value to be had in file-sharing – on the other, those that argue it is totally destructive and leads to an inevitable decline in sales.
With regard to new business models – everyone argues that we need them – even the labels agree. But the conservative argument is that as long as file-sharing persists it hampers the launching of new products and therefore file-sharing must be suppressed. The libertarians argue that file-sharing cannot be suppressed and that the new models need to be encouraged as quickly as possible and that the labels are preventing them by not licensing more innovative models. But, even as one label tries to innovate, another holds back – afraid of cannibalising with a new model the only digital revenues they already have (iTunes).
The new proposal from Lord Peter Mandelson for the UK to adopt a policy of broadband account suspension to be applied to the heaviest sharers, the now famous “egregious offenders” has sparked the new row. The Featured Artists Coalition voiced strong opposition to this and fuelled a heated internal argument inside the music industry. Lily Allen piped up in a strong voice – unexpectedly putting the conservative argument and saying “it’s not alright” to file-share. As a result the labels got very excited and did everything they could to “help” her and a huge amount of abuse came down on her head from the online community.
But Lily did speak out in a significant way. Her intervention highlighted the conflicted feelings of many musicians and artists. On the one hand they recognise the incredible potential and value of the net – on the other hand they can’t feel entirely comfortable knowing that their ability to make a living from their own creativity is being reduced by the actions of millions of people who consume without valuing their work – because they can.
So on Thursday night last week we gathered together at Air Studios in Hampstead, north west London, a group of about eighty recording artists – some well known – some more obscure – to try to explore the issues and where artists stood. Members from all sorts of bands like Pink Floyd, Radiohead, Blur, Travis, Keane, Marillion were there, Billy Bragg who is as impassioned and politically savvy as they come, David Arnold who writes the Bond music, Mike Batt who is an artist and the vice-chairman of the BPI all sat there together – ready for a ding dong. In an upstairs room, with his ear to the wall, George Michael was getting reports of the proceedings. Annie Lennox had her digital representative relaying events by phone. We sat in the round, in the studio’s cosy wood back-room with the old church stained-glass windows looking down on us, the paraphernalia of recording equipment shoved back to the walls and a couple of microphones to give people something to hold on to when they talked. About fifteen minutes or so after the discussion began, a timid and tearful Lily Allen came into the room, crouching behind the back row at first. She was encouraged forward and applauded for attending – and was quickly given a seat on the front row to take part in the debate which I had the dubious honour to be chairing. She was tearful, she was angry, she was foul-mouthed and she was eloquent. The whole debate didn’t entirely revolve around her, but she and Billy Bragg became the respective voices of the opposing positions.
The arguments swung back and forth. The conservative view is as strong among many artists as is the libertarian position. There was no particular rationale to which artists adopted which position and for an hour or so the debate simply swung back and forth. One guy from the Long Pigs, got very angry and walked out, saying something about how he “couldn’t understand why you’re being so soft on them – they need to be told”. Billy Bragg delivered an incredible, rowsing speech to huge applause about the need to be nurturing fans and the relationship that an artist has with them is the only one that counts. As the clock reached towards nine pm, I tried to push the room towards a vote. I thought that perhaps while they wouldn’t get agreement on the key issue of suspending peoples’ accounts, maybe we could all agree on the long term educational, cultural change that was needed and that new models were now critically required, perhaps we could conclude by emphasising the positive stuff we do all share.
But then something remarkable happened. As I pushed them to close, they wanted to argue on and the energy in the room suddenly lifted. Someone suggested that perhaps not suspension but bandwidth slowing could be a solution. Perhaps the ability to use email and basic web-serving could be preserved but the high bandwidth needed to make file-sharing worthwhile could be reduced. The room leapt on this compromise with a speed and a degree of excitement that we hadn’t seen all evening. No matter that it would cost the ISPs more to do this than to cut people off. No matter that people could still file-share just more slowly. No matter that squeezing might require as much of an invasion of privacy as suspension – a compromise position was in the air – and everyone leapt on it.
I called for a show of hands and about sixty percent of them went up, including Lily’s and Billy’s in favour of bandwidth squeezing. A significant minority voted against – mostly because they were libertarian, but a few who strongly insisted that hanging and flogging was too good for file sharers. There was a feeling of elation. Euphoria was in the air. Never mind the fine detail, much more importantly, the artist community had become united. Talking face to face, not through the distorting lenses of the media but in privacy with no reporters and no photographers in the room – the artists found common cause and we all celebrated that.
And so the meeting ended with a feverish capturing of the sentiment in a brief statement that was put out to the waiting media. And, as the hour neared midnight, the crowd drifted away with a sense that something important, even historic had just happened; something greater than reaching a consensus on a view about what to do about file-sharing to give to the government. Everyone had the feeling that the power of the artists’ community could be more powerful in this story going forward and that together they could work out solutions that might actually satisfy everyone – and that they were capable of practical deal making – more effectively than some of the other participants in the debate. Argue? of course they did! Compromise? Hell yeah! Who said tearful, emotional, angry artists – couldn’t also occasionally surprise themselves and act more like adults than the corporate grown ups could?
I was asked to contribute a few words following Ed O’Brien from Radiohead’s announcement of a keynote interview at Midem next year. I contributed a brief update on the progress and perspective of the FAC.
One of the smaller points in the Spotify fund-raising piece in the FT that flashed around the globe Tuesday was mention of a “strategic partner” in the wings. This was widely interpreted to mean a record company. Some might have raised an eyebrow and wondered why a single record company would wish to take a piece of Spotify when it’s widely acknowledged that only when a service can offer all the content from all the labels can it be said to be in a position to offer a meaningful consumer offering (niche and genre-specific takes aside). These days however, Universal appears to be flying in the face of that truism by going alone in its recently announced services with both Virgin and Orange. Perhaps having such a high share of the UK market gives them that confidence. Music Week reported earlier this month Universal has currently 44.5% of the UK album market and 46.5% of the singles. As the FT argues, having a record label on board might allow the company to negotiate lower royalty rates. Artists signed to such a label might begin to query the value of such a deal to them however.
So might this “strategic partner” in the wings be Universal? Well earlier in the year, around the time of Spotify’s launch, rumours swirled around the industry about the cost and terms of Spotify’s licenses with the major record labels. Estimates from between £4m and £7m have been bandied about as the amount they had to pay in upfronts to the majors to achieve their slam-dunk comprehensive license pack. Hence perhaps the need to raise substantial sums again so early on. If that weren’t crippling enough, a new and sophisticated deal option was rumoured too. In the early naughties, taking some equity in start-up music companies as well as charging upfront royalty fees was common practice. I like to think I helped pioneer such deals during my time in Los Angeles with EMI. It was therefore widely assumed that the majors had repeated this practice in the case of Spotify. But, it was also alleged that the majors had created a ‘put option’ in their deals that would allow them to cash in their shares in the event that the company’s valuation reached a certain threshold. Such an option would be attractive to both sides since it would motivate the labels to collaborate with Spotify to increase its valuation and help Spotify by incentivising the labels to help Spotify and not some of its competitors.
If the magic number was $200m then it might just be that this new round of investment is accompanied by a more significant re-jigging of the ownership of Spotify with several labels seeking to cash in and help their suffering bottom lines, while one or two others choose to enhance their holding position. One of the great advantages of cashing out in such a manner to the labels would be that no artists would need to be paid since the revenue came from the labels’ aggregated position not through individual performances. Of course, until the day when Spotify goes public (something of a distant prospect in this market) we may never know. How any of this plays into Apple’s thinking about Spotify’s iPhone app is hard to fathom – if indeed Apple are aware of this dimension at all.
And from the perspective of a large record label, what real value would building up a single player like this bring in the long term? It is often argued that if one record company were to take some ownership in a big market-dominant player, then the other competitor labels would never play ball and would support a competing player. But that was an argument made in the days when one major label didn’t control almost 50% of the market. So this begs the larger question, as the architecture of the music industry continually evolves and reshapes, what path should a record company take in the digital arena and how does it achieve its mutation from a recording and marketing business to a digital relationship management company? How fast can one company alone, get ahead of the rest of the industry before the others catch up? As the speed of change increases so, it would seem, does the opacity of the game. As Mr Grainge, Chairman of Universal Music, said to me recently with a twinkle in his eye: “Oh, I’m very, very opaque”.
“The degradation of the quality image is the only thing I fear from the digital age.” (Frank Stella, artist)
“How do you value consciousness?” (Frank Stella)
“Artists are lazy but they are capable of being mobilized. But they won’t organise around financial things but more about moral protests and causes.” (Frank Stella)
“In 1967, I turned up at A&M Music in a stolen car. I looked like a kid until you put me next to a real kid. Then I looked like a kid with a hangover.” (Paul Williams, songwriter)
“The Internet is like a supermarket shopping bag with all the things in it for free too.” (Milos Forman, film director)
The Featured Artists Coalition got off to a roaring public start this week. I had the honour of presenting the first general meeting of the organisation and introducing the key speakers Billy Bragg, Ed O’Brien, Kate Nash and Dave Rowntree. They each spoke from their individual experience and with great personal passion about how much freedom they felt in being able to create their own direct relationships with their fans and audiences, and make their own decisions about how to release their work. The meeting started with this video and it was clear that they each felt the incredible degree of change in the world has to be a source of excitement and opportunity for forward-thinking artists. The FAC is a reflection of that.
No one knows yet exactly where the focus of this new organisation will be exactly or what direction it will take, but the vibe in the room at Heaven was energised and hugely optimistic. There was a real sense that this was a historic moment in the development of the music industry, that this was the day when artists finally were acknowledged as being at the centre of the industry – and not a peripheral asset to be bargained down and exploited – the day when the record companies joined the ranks of suppliers to the artists – alongside collecting societies, publishers, digital delivery platforms, social and mobile network operators – and even gasp – managers!
Of course, the range of opinions among different artists about how to respond to technological and business challenges will be as diverse as are the artists themselves. But the underlying principles of a desire for transparency and for fair-dealing in the commercial aspects of making and selling music – and the desire to maintain personal ownership of their creative output – are incredibly strong unifying factors which bind together the interests of new and established acts.
There were unsigned bands who expressed real concerns: “If we sign up for the FAC, will that put our relationship with a major label under threat?” asked one new act about to sign a recording deal with a major. From the organisers of the FAC that was certainly not the intention and by the sounds of the welcoming comments from the BPI, it was not the view of the labels either. But there was also a real hunger for guidance and advice on a wide range of topics from navigating the digital landscape to contract reviews to advice on selecting a manager. The arrival of the FAC will be a tremendous enlightening and progressive force in the industry and should quickly be able to get to a point when it can act as an authoritative guide and give bands a chance to take a step back and reconsider their options. The FAC has the opportunity t0 offer real advice on approved alternatives to artists so that they can make informed choices about whether they want to sign to a label, go via digital distributor platform or set up their own site to sell to their fans.
Much has been said too about how the FAC will negotiate rights for its members and seek to take a seat at the table with the major players when deals are being struck. It will be interesting to see how the strengths of the organisation can be directed to best use in this area. Some companies like Myspace Music have been cautious in their response to first soundings, while others like Nokia welcome the direct involvement of artists and the creative community in what they’re doing.
There is lots of work for the FAC steering committee to do right now, including hiring a staff to turn these aspirations into reality. So wish them well on this journey, music should be the better for it!