Once again its award season in the music business. In the USA well have the Grammies (which are a worldwide benchmark) and in the UK the Brits. Both award ceremonies are designed as marketing tools, to highlight the ‘best’ recordings and product out there. Following the high point of the holiday season where sales are at their highest, the award ceremonies help keep the music and acts in the public eye.

Columns and web pages will be focused on these events. The industry hopes, as always, that they will create a direct boost in sales for the nominated acts (and winners) and indirectly get people into record shops or online stores, where they might pick up other music whilst browsing. 

In the UK we seem to allow the story of how well our acts are doing in the USA  to dominate proceedings. It is similar to the Oscars. Even though we have our own ceremonies (the Brits for music and BAFTAS for movies) we still think that doing well at US ceremonies is key. Thats not a ridiculous position, in that the USA is a huge market. However, surely what matters just as much is whether those acts are funded by US or UK labels. Its possible to have US acts which are owned by UK labels, and in many ways its healthy to have a portfolio of acts from around the world. 

Additionally, perhaps we should be concentrating on how well UK labels (or acts) are doing in other markets, such as Russia, China, India and Japan. Clearly those are difficult markets and not worth as much as the USA. Japan, excluded, all those markets have major piracy problems, but the potential for growth there is huge. If UK labels don’t invest in those markets (accepting that in the short term they might loose money) then they will loose out. At some point a home grown market will emerge from those markets, and if not challenged will could then ‘dump’ content back on our market.

This is not an argument for cultural protectionism, but for cultural aggressiveness. Just as the UK strives to have its content do well in the states, a mature well developed market, it should also be making huge steps into these new markets. Finding great talent, and developing it. Perhaps adopting different business models for different markets. After all, how much music do major labels sell in Africa? Not a lot as they do not see their model working there. However there is a working model out there and there is money to be made, its just a different model to the one in the USA, EU, Australia and Japan. 

Of course these award ceremonies are built very much around the traditional model. The idea of having an album of the year award, helps market a bulk of work in one go, but how many people actually buy albums over buying individual downloads? How many people are now just streaming the odd song?

What happens if artists sell a subscription or membership to their channel and then drip feed songs. They might never be packaged as an album, but are just a stream of content released over a long period of time. We can still have song of the year, and Act of the year though. I would expect that as new formats take form, we will see a change to these ceremonies.

For now though we are sometime away from that reality, so lets sit back and enjoy the fact that the Brits are back in town. Again.

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.

Music retail, as we all know, has been on the back-foot for sometime. However we have recently seen the music retail industry take some real body blows. Major retailers such as HMV, Zaavi and Woolworths were already moving music to the rear of the shop and films/games to the front. The supermarkets were even putting more shelf space to games and videos and less to music. 

2008 though saw an increase in this practise coupled with the economic crisis. First, Woolworths went bust which meant that not only music retail (mainstream music and cheap, bottom end product) loost a major presence but, Woolworth’s distribution arm also went under. It was responsible for a major cut of all music (and games/DVDs) distribution in the UK and left many major stores without product to sell. As a consequence Zaavi (used to be Virgin) went under as it was not able to fufill demand and at a time of the year when it would do most of its business, thats not good! 

Seperatly to this Pinnicle, a long standing independant distributor went under. This would have hit the small music shops and of course many, many independant labels. Once again, it was happening at the most crucial time in the industry, whether you are a label/publisher or a retailer. This is the time to sell product. 

Where does this leave us? Well, I think well see a number of labels go bust over the next 3-6 months, and many small shops leave the market place too. Zaavi might be saved, but if it is, the new owners will speed up the type of changes shops such as Zaavi and HMV have been pushing - i.e. relegating music and creating more interactive spaces for gaming and selling hardware and other physical product (clothing and what not). We will of course see a number of labels suffer too.

Once the dust settles, we might find that apart from the top 20 product, there is a much reduced demand and supply chain (to meet that demand) for CD/physical music product. I would be surprised if anyone takes the following decision, but perhaps its time for the majors to consider dropping the CD product in the UK, except for really specialist music, or music with a demographic who are not IT friendly, or for music which is clearly top 10/20 (and then, only sell it on CD for a very limited period of time). 

Either way this bad (Awful) holiday season for the UK, physical music scene has to been seen as a watershed and an opportunity to redefine the business model permanently.