The Same Old Song?December 8th, 2009 by Tommaso De Benetti
For most people it is hard to think of a downside to the internet revolution. The “information superhighway” has made business more efficient, staying in touch with friends easier, and the opportunities for our spare time more varied.
But, as with any revolution, there have been losers. Amongst those on the wrong side of change were the local second hand stores overshadowed by Ebay, the factories that once churned out now-archaic tools like fax machines and, most famously, the traditional music industry.
Older readers will remember a time when news was delivered on paper, music via disc and movies on film. If you didn’t pay for the content directly, you at least had to put up with advertisements on the TV or radio. This simple business model now seems like a lifetime ago.
With the benefit of hindsight we can see that developments facilitating the high speed delivery of media over the internet marked a dramatic point of no return for the music industry. The practices that were taken for granted in past decades are now either obsolete, or under pressure from the virtual environment that has developed.
These practices have made a lot of money for a long time, however, so it is hardly surprising that the traditional music industry has either been reluctant to embrace change, or even actively fought against it. The futility of the industry’s attempts, and the backlash amongst fans it caused, are once again easier to see in hindsight. As Geoff Taylor, head of the music industry body BPI recently admitted to the BBC: “The music industry would be in better shape now if it had engaged with Napster rather than fought it… I, for one, regret that we weren’t faster in figuring out how to create a sustainable model for music on the internet.”
What is obvious now is that in recent years the industry as a whole has been busy building shelters instead of seizing the opportunity to build windmills. Finally, this situation is slowly changing. After many false steps it seems successful business models are emerging from the limbo of aborted attempts and the scarce understanding of digitalization.
Planning the right business model is just part of the solution, however, and raises a number of important questions. For instance, how do you tackle the notion that the music industry is substantially a mono-directional business? And how do you capitalize on fans’ enthusiasm for the music they love?
To be effective, answers to these questions must embrace the new reality the internet has created and somehow take advantage of it. Emerging victorious from the revolution is an entire generation of tech-savy, file-sharing users. These users see the traditional music industry as obsolete, greedy and outpaced by technical possibilities. Rather than buying music, games and videos at a local shop, they consider it normal to download it all for free. Content is ripped from TV broadcasts and shared with a worldwide audience minutes later via sites such as YouTube.
What has also become apparent, however, is that this traffic is not necessarily all one-way. This new generation will download music for free, but are also keen use their skills to remix media contents, create fan art, parodies and tributes, and share them with friends through social networks. Trent Reznor, connectivity evangelist and the mastermind behind Nine Inch Nails, recently gave away hundreds of GB of video material to fans, giving them the chance to freely edit and re-submit it. This idea built on an earlier experiment called the Ghosts Film Festival. This “festival” was a competition he created encouraging fans to create their own home-made video clips, using music from the Nine Inch Nails Ghosts I-IV album as the soundtrack. In response, fans created hundreds of high quality and original videos, which together generated several million hits on YouTube. In effect Reznor generated massive interest in the album with minimal effort and virtually no marketing budget. By asking for collaboration and allowing explicit usage of his materials, he effectively crowdsourced his marketing campaign to his best possible allies: his fans.
It is unclear at this early stage what experiments like Reznor’s will mean for the industry. The success of any media product is highly unpredictable. Precautionary market research and adherence to established trends can help, but when innovation is necessary, a high element of risk must be taken into account. Even so, we now know that many people will take the opportunity contribute to something they consider important, and in doing so often produce valuable results without seeking payment.
New developments in web technology and networks have created a number of interesting questions such as:
• What happens when the artist’s audience is empowered with raw materials and crowd sourcing tools?
• How do fans contribute in creating a community? Can they become volunteer workers?
• How does the web challenge copyright regulations and how can this be adapted to a new collaborative model?
• Will the industry stick to the “sue everybody” technique or embrace the shift?
• How will the economics of the market change if the audience can contribute back?
In music distribution the “good old way of doing things” is now recognized as an increasingly inefficient and frustrating mindset both for artists and their fans. Regardless of what the music industry thinks or wants, a new and wider marketplace must and will be created. The prize for those willing to meet this challenge a lucrative market with widespread access, fairness for all parties involved and an active and engaged audience that has the potential to help the industry in ways we can now only start to imagine. It may be the same old song, but it has a different meaning since the internet came along.