February 27, 2007 4:25 PM PST
Music executives judge Jobs, lament losses
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Apple, digital rights management (DRM) and the public's willingness to pirate music were discussed, debated and lamented once more by attendees of the Digital Music Forum East conference.
"We're running out of time," Ted Cohen, managing director of music consulting firm TAG Strategic, told the roughly 200 attendees. "We need to get money flowing from consumers and get them used to paying for music again."
The call to arms by Cohen, who was moderating a panel discussion titled "The State of the Digital Union," comes as the music industry suffers through one of the worst slumps in its history.
CD sales fell 23 percent worldwide between 2000 and 2006. Legal sales of digital songs aren't making up the difference either. Last year saw a 131 percent jump in digital sales, but overall the industry still saw about a 4 percent decline in revenue.
That has the industry pointing fingers at a number of things they believe caused the decline.
At the opening of the conference, some of the panel members lashed out at Jobs. Members said Jobs' call three weeks ago for DRM-free music was "insincere" and a "red herring."
"Imagine a world where every online store sells DRM-free music encoded in open licensable formats," Jobs wrote in a letter that rocked the music industry. "In such a world, any player can play music purchased from any store, and any store can sell music which is playable on all players. This is clearly the best alternative for consumers, and Apple would embrace it in a heartbeat."
Jobs' position was perceived by many in the music industry as a 180-degree shift in direction. The view expressed at the conference is that Apple has maintained a stranglehold on the digital music industry by locking up iTunes music with DRM.
Cohen told the audience that if Jobs was really sincere about doing away with DRM, he would soon release movies from Disney--the studio Jobs holds a major stake in--without any software protection. An Apple representative declined to comment on Tuesday on remarks made by the panel.
Panel member Mike Bebel, CEO of Ruckus music service, said: "Look, I don't think anybody is necessarily down on Apple. The problem is the proprietary implementation of technology...and it's causing everybody else who is participating in the marketplace--the other service providers, the labels, the users--a lot of pain. If they could simply open it up, everybody would love them."
The role of DRM
Panel members--who included Thomas Gewecke, Sony BMG senior vice president, and Gabriel Levy, general manager of RealNetworks Europe--were divided about what the music industry should do about DRM in general.
Most of the panel members, save for Greg Scholl, CEO of independent music label The Orchard, believe that some form of DRM is necessary.
Scholl said flatly that DRM doesn't work. "The idea that DRM gives us choice isn't right," he said.
"The economics of the business are over for good and aren't ever going to be the way they were before," Scholl said. This is a position that some in the music industry are starting to warm up to.
In January, EMI said it was reviewing a request by the Electronic Frontier Foundation to allow reverse engineering of its digital rights management software. That EMI would even consider the proposal was seen in many circles as a step forward by the anti-DRM camp.
Gewecke also defended record labels against the criticism that the music industry has its head in the sand and just doesn't understand the Digital Age. He said that Sony BMG is working with technologists and retailers, and is constantly is looking for technological solutions to some of the industry's problems.
He also said that despite all the bad news, there's plenty for the sector to be encouraged about.
"We routinely talk to companies about what's different," Gewecke said. "We're constantly looking for where value is being created in a business model. We are being flexible. There's still an evolution that has to happen. I say it's an optimistic time considering there's more music being listened to now than ever before. There's more opportunities to monetize the music. We want to be out there looking for new ideas and companies."
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robber barrons of the early 19th centry. How can we stick it to the
consumer, and everyone else that listens to music. And they
wonder why people pirate music. Hey Dipstick music guys... move
ahead with the inevitable.., music free of DRM, or be left in the
scrap heap of history with the 45's 33's and 8 tracks. Get a clue.
robber barrons of the early 19th centry. How can we stick it to the
consumer, and everyone else that listens to music. And they
wonder why people pirate music. Hey Dipstick music guys... move
ahead with the inevitable.., music free of DRM, or be left in the
scrap heap of history with the 45's 33's and 8 tracks. Get a clue.
They know waht they want, which is to squeeze the consumer off every possible cent, keeping him buying the same music over and over if he cares to listen to it, pay the artists in peanuts if they can get away with it, and go riding around in big limos surrounded by teenage wannabees.
What they don't know is how to make that happen anymore...
I am just turned off by all of them. I'm sticking to old favorites, and looking on indie labels & online indie online stations, because I'm really sick of you guys being spoilers.
Bah!
NOT steal music from other sources. The reason I don't buy more
music has nothing to do with DRM or Steve Jobs...it's the lack of
original and entertaining music. In a world of homogenized emo/
alt/boy bands and girl acts (a'la Gwen, Jojo, Fergie, Avril, etc) that
are hardly discernable from one another it's hard to get invested in
the music scene. Find something good and original and the
consumer will follow.
Why don't they blame the technology for the compact disc? If we were still using cassette tapes or 8-tracks, this would be fine, right?
These guys are ridiculous.
a while. There was also a lot of crap released between 1965 and
1975l.
What happened is that the baby boomers forgot to teach their
kids basic ethics. Downloading pirated music is like a little
white lie these days.
Evolve buddy! Most of anything anywhere anytime--sucks.
you like, and I'll suggest some current additions to your
collection.
Pop music today is engineered to the exact specifications of the music industry. Each "act" consists of small numbers of individuals with no specific talent or skill performing simple mindless ditties which are better suited to electronic reproduction than to live performance. Imagine if you had to replace Beyonce with 67 virtuoso performers. After salaries and production costs, there wouldn't be much room for profit.
for about $4 something a month. Suits me just fine. Hope the
artists are making at least something from that.
It's free and you create your own stations based on the artist you
like to listen to.
For example you can set up the "Jack Johnson" station and it will
play not only J.J. but many other artists of the same style or
genre and you can decide if you like or dislike the new artist.
You can also set up the:
"Jack Johnson/Black Eyed Peas/Modest Mouse/Radiohead/Janes
Addiction/Red Hot Chili Peppers" station
or the
"Beatles/Rolling Stones/Led Zepplin/Van Halen/Eric Clapton/Bob
Dylan" station.
Or what ever combination you like or even genre you like and it's
free!
Disclaimer:
I do not nor have I ever been an employee of Pandora.com ;-)
begging for an argument, and rightfully so. Every generation's
music is always the best music ever, live with it.
The problem is instead the vast amount of artists that are signed
each year, and get a half-assed marketing plan that relys
entirely on the strenth of the first single. With so many new
artists appearing every week, consumers are confused and
choose just to sample a little of everything, just buy singles
instead of the whole album. That's fine for Apple, they love the
business. But labels don't make money for singles, they make
money from the physical CD's being bought (mostly because
they are COMPLETELY screwing over the artist).
But I agree that these industry leaders are clueless. Don't come
down on Jobs, learn a god damn lesson from him, and watch
sales increase ten fold like apple has since the beginning of their
online music store.
(yes, this is a shameless plug)
As Jobs asked, why do they insist on DRM for online sales, but not for the 90+% of music sold on CD?
my music library. What I don't have is time to listen to them all
anymore. Music is but one of many entertainment choices I
have and when I'm not working I just don't have the time to be
listening to the music I own. Why would I buy more? I have a
$14.01 credit on my iTunes account and it's been there forever.
I haven't found anything I want to buy (any suggestions?: I like
alt like radiohead, nin, u2 and jazz).
Why buy music when I have internet radio, I listen to public radio
in my car and If I wanted it, satellite radio.
The music execs need to figure out a way to give customers
something for their money other than the music. When people
buy collectible albums it's not due to the music, it's do to the
collectible. Give me something worth collecting and I might
spring for it even if I already own the music. Disney does it with
DVD and I bet their are people who have several copies of the
same movie in different packages with different extras. Do the
same thing with music and maybe customers will show some
interest.
Oh, and lower the prices.
my music library. What I don't have is time to listen to them all
anymore. Music is but one of many entertainment choices I
have and when I'm not working I just don't have the time to be
listening to the music I own. Why would I buy more? I have a
$14.01 credit on my iTunes account and it's been there forever.
I haven't found anything I want to buy (any suggestions?: I like
alt like radiohead, nin, u2 and jazz).
Why buy music when I have internet radio, I listen to public radio
in my car and If I wanted it, satellite radio.
The music execs need to figure out a way to give customers
something for their money other than the music. When people
buy collectible albums it's not due to the music, it's due to the
collectible. Give me something worth collecting and I might
spring for it even if I already own the music. Disney does it with
DVDs and I bet there are people who have several copies of the
same movie in different packages with different extras. Do the
same thing with music and maybe customers will show some
interest.
Oh, and lower the prices.
"we are part of a (capitalist) market economy, hence we are
guaranteed to make profits (whatever business model we apply)
... and if not a (any) law has to be established which forces
society to give us the money we deserve (according to our
business plan, not according to any products or services we
deliver).
This sounds like a socialist call for guaranteed wages for
everybody ... except that: "this time round it is only for the
music execs -- sorry, mate"
These musicians have used their many talents and opportunities to produce great music...but instead have embraced music that reaks of rotting garbage. One Hundred Percent of what you're seeing mr and mrs music executive is a crowd unwilling to buy up the stinking trash.
oh yeah, denius - death to apple...
We can consume an infinite amount of music and there is a significant segment of consumers always willing to try new stuff so we know that the problem is not with the consumer demand. There are simply excellent artists producing great music everyday all over the world (we don?t necessarily get them all on our radar screen). There is always something new that we like so we know that the issue is not with the product. The issue lies in the distribution. The industry has simply got it WRONG. Either they take steps to fix the distribution system or they will continue to see declining sales.
I am 44 years old so have seen, records, cassettes and CD's. Now we are in the era of digital music yet someone who used to buy records, cassettes and CD's no longer purchases music. Don't get me wrong, I love music but I refuse to buy it under the current conditions.
I share the vision of Steve Jobs when he says "Imagine a world where every online store sells DRM-free music encoded in open licensable formats," Jobs wrote in a letter that rocked the music industry. "In such a world, any player can play music purchased from any store, and any store can sell music which is playable on all players. This is clearly the best alternative for consumers, and Apple would embrace it in a heartbeat."
The industry may think that suing its own (potential) customers is a good idea but it seems to me that this is a clear sign that there is something seriously wrong. While I can understand the industry?s apprehension regarding piracy if music was distributed DRM-free, I cannot agree with the approach being taken today.
Perhaps the whole music industry business model has to be re-examined. If the volume was there then the cost per minute (or byte, or song) of music could come down to a reasonable level where the whole question of piracy becomes irrelevant since there won?t be any. If the price is right a consumer will always buy the genuine article rather than take a pirated copy with no guarantee of quality.
The only question in my mind is how to create a distribution system that enables the cost of music to scale downwards with increasing volume. Changes in the marketing of music will also have to occur with lower cost yet more effective marketing techniques being employed. The marketing and distribution does not have to be limited to the online medium alone. I for one have many views on how the revenue per square foot of existing music retailers (and other players in the retail landscape) can be enhanced while reducing the distribution and inventory holding costs. Of course as long as the industry is not willing to move to DRM-Free distribution nothing can be implemented.
Will we still have mega stars making mega bucks in this new world of DRM-Free music? The answer is quite simply yes however a significant portion their earnings may not come from the sale of the music alone.
So I suppose in short the question is whether or not those who control the industry have the courage to change, to listen to their customers and to do the right thing so we all start buying music again.
Will someone please lead the way!!
For the music exec's is time to face the facts: they're expendable, no the artists. The artists are the one's who should get rich, and they could on cents per song, video, etc...
- state of the music industry
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by kosmofenster
February 28, 2007 4:22 AM PST
- blaming the technology companies is off the mark. content owners control DRM rules and if they recognize they are not the solution, they are the ones to take the decision to remove them. this isn't rocket scientry, it's the music business.
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- Hey Buy direct from the Artist!!
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by redison
February 28, 2007 5:11 AM PST
- Thats what I do, bypassing the pin-brained greedy music
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See all 89 Comments >>companies and their execs. And most of the music I like cannot
be found in either pirated or legal downloadable form! OK I have
eclectic tastes, but you would be amazed at what is offered for
sale direct from the artists websites, and its good karma since
the artists get paid as well.
At 48, I have bought records (33, 45 and 78), cassettes, and
OMG 8-tracks! I do believe that the music offered in recent
times is really commoditised. For me the best music was from
1965 to about 1985, do there!