While major music labels agree that the sale of music via the Web still faces hurdles, they vow that experience and market presence will help ensure that traditional music powers succeed in the digital age.
Representatives from three of the world’s largest music labels met recently in San Francisco for a panel discussion at Gavin.com’s Music on the Net conference. The trio discussed the progress made to date in putting music on the Internet along with the difficulties technology poses for on-line copyright protection.
With companies like Napster Inc. and MP3.com Inc. garnering a fair amount of attention for their controversial approach to ‘net music distribution, the music industry heavyweights said their knowledge of artist promotion techniques will aid traditional players’ success in the long run. The group debated how to take advantage of promotional techniques in the digital medium and how to deal with the roadblocks that Internet technology poses to conventional business models.
Kevin Conroy, chief marketing officer and president of new technology for BMG Entertainment Inc., sparked the panel’s discussion by addressing what he sees as one of the music industry’s hidden roles in music distribution.
“It is really about creating value around copyrights,” he said.
While attention has centred on how songs change hands on-line, Conroy suggested that the promotion of artists by record labels makes music possible and brings bands to the public’s attention.
“You don’t see anybody going to Napster to get songs from the unsigned artist,” said Jay Samit, senior vice president of new media at EMI Group PLC. “Nobody wants them.”
Samit backed up Conroy’s sentiments with vehement support for bands like Metallica who have supported music labels in their fight against non-commercial music trading Web sites.
He argued that bands appreciate the resources labels contribute toward the growth of their popularity and the expansion of their careers. Samit encouraged the Gavin.com audience to take the view that a record label’s gamble on a young artist contributes significantly to that artist’s future success.
He gave the example of attending a concert given by a new band who had yet to release an album. The entire audience, however, knew all the words to the band’s songs. Samit said they must have downloaded the songs from a Napster-like site and predicted that the audience members would therefore be unlikely to buy the album upon release. “That may be the end of their (the band’s) career,” he added.
The industry pundits also turned to look at how Internet-based pricing models might become more flexible as a result of better technology.
“In a perfect world, you would charge more for a big hit than you will for the tenth track on a Rick Springfield record,” said Larry Kenswil, president of eLabs for Universal Music Group Inc., referring to a U.S. one-hit wonder actor-turned-musician from the 1980s.
Kenswil added that the Internet could bring about a new pricing model for tunes. While traditional music retail sales place certain restrictions on price fluctuations for an album, pricing for ‘net titles could change more rapidly and thereby reflect the “true” value of a song, he said.
