As demonstrated here, it seems that the UK will not get tough with those who download music (mainly) and film (secondly, with games following on from that) illegally. Other countries, lead by France, will be (or have) legislated on this issue.

However, despite France’s very aggressive laws, it will be interesting to find out how many people France will be pursuing through the courts on this issue. They are adopting a three strikes and you are out (disconnected from the net) system, which is what the BPI in the UK would like to see.

I wouldn’t be surprised if at some point a human rights organisation took a test case to the European Court for Human Rights to fight for our basic human right to have access to the democracy of all technologies; the internet. So we may find that this new law never really gets into ‘gear’ anyway. After all, when someone commits a driving offense, you can take away their right to drive, but not to access roads. I know thats not the strongest legal analogy/comparison, but you get the indicative point I’m trying to make. Hence, if the UK is not going to legislate, and if France’s efforts will be undermined via the courts, how do we move forward? How do we stop piracy?

Well, as discussed on our podcast (music industry news), the main two methods which are immediately available to us is education and changes in business models. However, our approach to education should not just explain that its ‘wrong’ (which is often counter productive and patronising). Instead, it should be a form of education that explains who is involved in making content so that consumers or non-consumers can start to relate to those who are losing out.

The second method is to bypass it altogether. FInd new income streams, whether they be ‘real world’ (such as tours etc) or changing the link between the person, or persons paying for the music and the actual consumer of the music. For example companies which are setup to offer free music (streamed or downloaded) but which is paid for by banner ads etc.

However, surely the future is about tagging all audio with metadata, and then making sure that data is read by all major OS platforms. Windows, Mac OSX, Linux, NXE, Sony XMB etc etc. Just as with the game consoles and mobile phones, its becoming normal for users to have to input credit card details into their machines so that content can be bought and accessed all the time. Well, if we had a working, fully supported metadata system, then as a piece of music or film was played, money would automatically be taken and delivered to one’s local collection society (to be shared amongst the named creators and IP owners). Does this mean we would be paying for everything we listen to or experience?

It doesn’t have to. Some sites would offer ‘free to listen/download’ experiences as they would have purchased a global license (paid for via advertising for example) and the consumer would not be charged from downloading on that site. However, should the consumer wish to pass the file onto the web, then anyone downloading it would activate the metadata contained within it (as it would ‘know’ it wasn’t a direct download from a licensed site) thereby causing the OS to charge the users credit card/mobile phone bill.

What happens if someone wants to transfer content from one machine to another? As long as the OS could recognise it was a machine to machine connection (similar to HDMI being ‘aware’) then it would allow it at no cost.

This might sound very complicated, but I doubt its more complicated than the current ‘lack of system’. Also its designed to make the rules clear, and provide an income for everyone. What stands in its way?

1. Hardware/software companies continuing to support their own files and formats to help boost a certain type of platform.
2. Collection agencies not working together. Something which is not getting better. Europe has a plethora of them, which in 2009 is looking very outdated. If the whole of the USA has only a handful, how come Europe has agencies for everyone country, with some countries having more than one?!!?
3. Civil Rights campaigns, complaining people are being charged to access information on the web. Someone will need to tell them that content owners, and creators have rights, copyrights, which need to be respected too. No one ever protested about having to buy a book or even pay a small fee to borrow it from some libraries (via a joining charge or local/national tax). 
4. We now have millions users with ‘old’ hardware and software already out there, which would not be compatible with this proposed system (without a software update - not possible on all devices). The longer we wait to create the system, the harder it will be to implement it without disenfranchising large members of the audience. Trying to service both audiences, would be similar to the effect of having DRM in files whilst still selling non-protected audio CDs.

If a system of metadata is not going to work, or cannot be implemented then all is not doom and gloom. However, what it means is that we will have to rely on education and alternative business models (alternative from just digitzing the traditional record label model, still pursued by many) exclusively. Not a disaster at all, but it will mean that the debate on the rights and wrongs of piracy and more importantly, the monitory value of music will never end.

Our first podcast episode of 2009 is now online. HERE

We are pleased to welcome Simon Young back to the show. Remember to subscribe at Itunes, OR with your RSS reader. Lastly remember you can email us at podcast@musicresearch.com or make contact via this blog.

Steven

For sometime we have been used to music and advertising working together. In many ways, its never been subtle, from the famous Pepsi style ads, to HIp Hop acts wearing branded goods such as Nike and Reebok.

However, its never become a point of standard practise. Mainly because not all acts or all songs reach a large enough or relevant enough audience. Additionally, what with the economy being so tough at present, advertisers demand stats and feedback to deomstrate the bang they get for their buck.

A few years back, Sting’s video for Desert Rose was doubled up as the advert for a Jaguar. It was still subtle enough (in contrast to a pepsi ad) to fit around the narrative of the video but had enough shots of the car so that it could be used in a shortened form for tv and cinema adverts.

With everyone, reaching out and grasping new income models will the idea of advertiser driven content raise its head? We are already seeing how much of the tv industry is supplementing its income due to a market that has gone through huge amounts of fragmentation, and due to advert slots themselves being less effective partially attributed to the tivo style technologies that now exist. 

Shows are either being commissioned by sponsors or prexisting shows are being touted to possible sponsors who may like the concept and see a fit with their product or message.

Why not the same with music? I’m not only suggesting this for individual tracks or artists. Why not apply this approach to the great untapped ‘brand’ of the label itself? Labels have never understood brand. Even though they take great pride in their LABEL, apart from the DefJams or specialist jazz labels of this world, the ‘label’ has rarely stood for anything in the minds of the consumer. Consumers, for the large part, did not buy this or that album because it was on Universal or EMI. They followed the act.

However, if the labels can actually come up with identities (you could call them labels!) which have a very strong focus, and start to sell them as ‘channels’ being targeted at specific target groups- why then they might find that they have a platform which advertisers will want to embrace. This would help create targeted income on Utube Channels, physical product, tv slots. One can even see opportunities with regard to how their music is ‘presented’ on platforms such as Itunes, Amazon or the new mobile ‘unlimited’ music services.

Of course this could have a cynical affect on the music. However, it shouldn’t. After all, record labels have always pushed music that was appealing to an audience. Without doing that, it would not sell and hence not be supported by the label. All we are doing here is doing it in a more coordinated way and making sure the record company’s own label really means something.

We have already seen how music shows on tv are being snapped up by sponsors and ad agencies the world over. Now is the time to take that trend and make it apply to music in general and not just American idol and its copycat shows.

its being reported that Sony refused to allow the Playstation brand to be used on a Sony Ericsson handset. Well those of us in the music industry (and those of us with sources in gadget world) know the real truth. Sony is currently in the process of reorganising its product and brand offerings. Additionally its doing this in such a way, so that they all feed vertically into its actual business model. I.E. not just doing things to propogate technology or for market share, but doing ‘things’ which result in money (always a good idea for a business I say).

We saw earlier in the year how they split with BMG and that SONYBMG are now Sony. Well 2009 or start of 2010 might be the year they do the same with Sony Ericsson. 

Can Sony release a PSP based Iphone killer, able to play top games, stream and download music and movies, and do this over a 3G and WIFI network? For sure, and once the cost is reduced to allow this all to happen without it killing the current crop of batteries they will. Making phone calls on such a device would clearly kill a current battery if you also wanted to run God Of War on it for 2 hours.

However the other stumbling block is a simple one. As part of their deal with Ericsson, one assumes Sony can’t actually make phones. Hence, by buying Ericsson out they will be free to move in this direction.

Battery life will be the technical stumbling block, but huge progress is being made in that area.

Sony Ericsson have already been releasing some great music and video enabled phones, and recently Sony have released (or about to release) a beautiful OLED powered competitor to the Ipod Touch (excluding any decent game functionality). A bringing together of these technologies along with PSP intergration would make an awesome device for us techies. 

However would it be a new paradigm in the world of music and content? Maybe it would be too techie for ‘Joe the Plumber’ or even ‘Arthur the Academic’ who listens to music and podcasts whilst on the tube. Also, is the PSP brand worth much? The first PSP has hardly been a life changing success, and often confuses those into thinking all it does is play games. Meanwhile Apple are busy rebranding the IPOD/Iphone brand into making people realise its also a gaming platform.

For example, the PS3 does EVERYTHING. In fact it has to be one of the best multimedia boxes ever created! However, people don’t see the value in the price. Why? Because consumers perceive it as a games console and never realise what else the machine can do, and does really, really well. 

However, what if Sony canabalised their brands and products and eventually sold all phones/devices as Playstation and advertised it as Playstation with Music. Playstation with Film. I’m not suggesting these are particulary great marketing phrases - the point Im trying to get across is that they need to redfine what the word Playstation or PS means to consumers. Make it clear that its a way of saying ‘this device means fun and leisure, ALL your leisure.’

No one wins points for being subtle. Clever adverts which imply but never say what you can do, might be great art but don’t sell ideas or products. Imagine this: ‘Hey, what you are playing on your phone?’ says character A. Character B responds ’some music by …., then Im gonna watch an episode of Lost, and tonight Ill play some Killzone.’

If all the content named was popular or classic, and if all of it was owned and ONLY available via Sony online shops linked to the hardware - and if that was made upfront, and clear with the consumers. Surely then, they would have a total solution and a great business model?

As expected Apple have at last unlocked the music from Itunes. They have also allowed people to purchase music on the move not only by Wi-FI but by 3G (which is getting faster and faster). Still, that leaves all the video content locked up tight. Thats a bigger issue, and remember NOT just for film makers but for muscians and labels too.

The market for downloadable video will still fail to go mainstream until these locks are taken off, and that affects everyone. After all, a great source of income for song writers, labels and composers is from tv shows and films. The arguments are the same, the actual risk is similar. However the perceived risk is higher as at present film companies still make very good money from DVDs and are seeing growth with BlueRay, hence they are not so keen to embrace the download future whole heartedly.

Meanwhile, when will Apple offer streaming via the Itunes store for music? This would clearly need a separate form of agreement with the labels and would have to be priced and pitched to compliment and not compete with the download service. However, as we move into the world of cloud computing, surely its the logcal step? As discussed in previous posts, why download when I can stream? I would happily pay a yearly ‘pass’ which would allow me to download and stream unlimited (fair usage applies of course) amounts of content. It would also allow Apple to cement their traditional hold on Ipod users, which has now been lost with DRM free music. If their favourite ‘interface’ for streaming became the Ipod/Itouch/Iphone then that would become the de-facto ’experience’ for accessing content for many people - thereby locking them into that platform for sometime (with their favourites and listening profiles locked into it).

Why are people dragging their heels on these services? Is it a technical issue holding us back? Is it legal in nature? Or, is it just that executives are just too scared to go into the water for a swim and still prefer to hold on to the edge of the pool and chat whilst watching the other swimmers do full lengths?

There is a great article on CNET here, on a new site called Bopaboo which allows people to sell their MP3s on. My initial view is this is bonkers and a paragraph of the article states why:

“Patrick Ross, executive director of the Copyright Alliance, a watchdog group made up of artists, producers and other content creators, chuckled when I explained Bopaboo’s business model.

“Clearly a first-sale defense won’t apply here,” Ross said. “In the case of a book or any other creative work, you no longer possess the work once you sell it…It’s also hard for me to imagine the model succeeding because if somebody wants to pay for works they will pay for it at a legal site and see that creators are compensated. If they are willing to break the rules, they would just go on (P2P service) Lime Wire and get it for free. I hope (Bopaboo) crashes and burns before it gets sued. It seems like a flawed business model as well as an illegal business model.”" From CNET

However, surely it COULD be given the green light if it was only done with files with DRM, and if somehow the DRM was transported with the file. Clearly, DRM is on the way out, so its not really relevant, but for those with tons of files with DRM it might be legitmate question. Actually, DRM is on the way out for Audio but not for TV and Film downloads, so for this market it may be very very relevant. 

When selling CDs the music industry has always stated that what you are buying is not the physical product, but the license that goes with it. Hence, if the license states that you can only listen to the audio on tuesdays, whilst standing on one leg wearing women’s underwear, then you have to not to be in breach of the license. Accordingly labels have tried to limit the license so resale is not allowed, and are stating that case with digital downloads.

Yet, first-sale rights exist before the license comes into play which is why second hand sales of physical products exist. So even though there are clear issues (as the quote above points out) with digital media, it could be argued that there is an issue here that needs to be resolved somehow. Someone could build up a huge library of tv shows and films and then decide if they want to sell them on. Additionally, what happens if someone sells a computer, with all that content still on the machine (but perhaps it was backed up on a separate Hard Drive). Thats clearly theft too, but one can see that kind of setup happening as people try to add value to their second hand hardware (the same with IPODs etc). 

In fact there are many shops in the US/UK that sell second hand IPODs, even Amazon and Ebay do. Surely if they are pre-loaded with music, films and tv shows then they too are aiding and abetting breaking copyright as much as Bopaboo?

Apart from the speculation on Steve Job’s health (and we wish him well), this week’s MacWorld is key to lovers of music. Everyone is waiting and watching to see if Apple dump DRM on music (films and tv would be cool too!). As the BBC reports here, deals have supposedly been struck with all the major labels (much of the indie catalogue is already DRM free on Itunes). 

Additionally, would Apple start a music streaming service via Itunes? Remember you can now access Wifi on the go via your Itouch etc, so turning it into a streaming service at home and on the move would be swell. On the hardware front, there is also speculation that either at this MacWorld or another, a tablet device will be shown. 

This could be of great interest to music producers. We have already seen various Itouch/Iphone applications that give limited music making functionality to the platform. However the power, and screen size limits the functionality. A tablet device could really be used as a live instrument and a new sort of portable sequencer if required. 

As always, MacWorld, technically a non- music event continues to be of great importance to the music industry in general. And to think that Apple computer signed a deal with Apple Records all those years ago saying they would keep out of the music industry. Now thats what I call Irony.

EMI has been struggling for a while now. In fact struggling is probably an understatement. Bought by Guy Hands a few years back now for around £3 billion, in today’s climate (and based on EMI’s continued slide into financial armageddon) surely the banks will soon call in their debt?

EMI claimed at the end of December, that its last 6 months had been positive resulting in cash being generated. Perhaps the slide into financial doom is over? March will be the important month in 2009 as thats when its banker checks the state of the finances, making sure they are in line with the risk and expectations required for the finance to continue and not be called in. 

However, as a huge part of EMI’s sales are in the UK, and as the UK music industry had an awful xmas (due to music sales switching to games, and the lack of coverage on the high street due to the Woolworths situation) one wonders if EMI will find that their position is not quite as positive as they had hoped?

Its rumoured that they are shutting down the world famous Olympic Studios. Recording studios in London (and the developed world) have been finding it tough going for some time, especially the large studios. EMI will concentrate on Abbey Roads, a studio which in recent years has diversified. Abbey Roads has become a specialist venue, and tv studio (home to Live at Abbey Roads - a Channel 4 TV series). Meanwhile its name and facility mix allows it to continue to be used for large budget games/films and top recording artists from around the world. However, the next 12 months will be crucial for Abbey Roads too as its fate is wrapped up in EMI’s. 

EMI needs to work out what it does and how. It doesn’t really have the time to be ‘experimenting’ in the market place and should either streamline down in a particular direction or raise the finance to move aggressively into a new market or distribution platform. It seems, though, that they either lack the direction, don’t know what the future holds (and hence are hedging their bets) or lack the finance to move aggressively to where they want due to the amount of debt they are burdened with. CNET reports that EMI are to launch their own download store, quoting a spokeswoman saying it is where they can ”experiment with new digital platforms.” Well surely the whole download store idea is not exactly something which needs much experimentation? We have Itunes, Amazon, Nokia, Napster, Emusic and many many more? What is EMI bringing to the party?

Ultimately those with a financial stake in the company will at some point ask - how best can our investment maintain or increase its value? Even if ‘turning the company around’ is slowly working, would we be better served by selling it whole, or in parts, to other companies with the direction, resources and finances to make best of the great assets locked into EMI and its heritage.

As reported on CNN, it would appear that the passing of 2008 into 2009 resulted in Microsoft’s Zune, music player, shutting down! 

Now this is a USA only product as far as Im aware, so it wasn’t a huge problem shared by many. Additionally Im not too sure too many people in the USA actually own one! However, its an interesting project which did bring WiFi sharing and downloads to the idea of portable music players.

I wonder if any other music players were hit by a similar bug? Or perhaps by the fact that an extra second was added to the end of the year? Still a platform which has lost its way, has got some free publicity. The questions is, once switched back on, where does the Zune go from here? Is it the handheld Xbox test platform as many expect? Will we see the Zune and sidekick combine to create a psp/Iphone beater in 2009/start of 2010?