California Copyright Conference : “The Music Industry: A Survival Guide for the Future”

Tuesday evening’s panel at the California Copyright Conference dinner in Sherman Oaks was quite upbeat considering the many uncertainties of these times. The panel, moderated by Shawn LeMone, ASCAP’s VP of Film/TV and Visual Media, and Diane Snyder-Ramirez, VP of Royalty Accounting and Administration at The Royalty Review Council, consisted of:
  • Russell Emanuel, CEO, Extreme Music
  • Amanda Marks, EVP/GM, Universal Music Distribution
  • Patrick Russo, Principal, The Salter Group
  • Kari Kimmell, Recording Artist and Songwriter
  • Victor Rodriguez, Music Director THQ, Inc.
The theme for the evening was, “synch licensing.” Traditional music industry boundaries continue to blur and each panelist discussed evolving practices from their individual perspectives. 
Patrick Russo began the discussion with an entertainment industry revenue analysis. The larger segment is growing and diversifying, although music revenues will continue to decline. The good news is, music is ubiquitous and a key component in a wide palette of entertainment properties. This creates new opportunities for licensing and publishing revenues.
Russell Emanuel described the huge shifts in the music library business. The industry is moving into what was once considered independent label territory. Extreme Music is courting independent, niche artists (mostly songwriters) rather than the more traditional jack-of-all-trades composers. 
Victor Rodriguez is producing video game scores with traditional film composers as well as scoring entire properties from music libraries. Music is being licensed for virtual social networks and multiple co-branding opportunities are emerging across media platforms.
Kari Kimmell’s music has been featured in over 100 film and television shows. She controls her catalog and handles the licensing and business development with music supervisors herself. Although business takes up 50% of her time these days, Kari is very excited about the successes and opportunities available to her as an independent artist. 
Amanda Marks is anticipating a surge of tablet devices, providing a compelling entertainment experience for consumers. She is excited about the potential of apps to filter music, cutting through the noise in the channel and bringing the cream to the top. App developing tools are becoming more affordable and available to artists. Amanda feels that music distribution will be firmly ensconced in the cloud in a few years. A licensed experience where listeners can get anything, anytime, anywhere, will be a game-changing alternative to pirated music.
Revenue opportunities for creators are a mix of licensing fees, back-end residuals and exposure (the highly coveted “Chyron”). How these trends can benefit musicians working in non-pop genres is not as clear but one thing is certain: The music industry is a moving target, accelerating every day. The keys to “Survival” are making great music, working hard, and staying ahead of new revenue opportunities.

Leveraging Internet Music Distribution

In a recent survey by British think tank Demos, researcher Peter Bradwell found that music listeners who participated in illegal file sharing behavior spent more money on music than listeners who did not admit to using illegal services. Two key paradigm shifts created by Internet distribution come to mind:

  1. Distribution, whether as playlists, recommendations, or downloads, is largely controlled by fans, not record labels or content creators.
  2. The per unit cost of ‘digital copies’ is essentially zero.

This creates a situation in which even an unlicensed transaction has value for the content owner; a possible new fan, and marketing data. The first challenge is to leverage that value. The second is creating legit services that provide a vastly better user experience than illegal file sharing at a competitive price. In addition, why not simply license file sharing behavior, leveling the marketplace? I know, easier said than done. The issues of copyright infringement are significant, but a major roadblock is the complexity of the traditional royalty model.

People will pay for innovative, superior products. Apple is a great example. Everyone grumbles about the proprietary nature of their business model, but folks are still lining up for iPhones in a recession. The music industry has the potential to transform itself, ushering in a new era of compelling, competitive, Internet marketing and distribution services. Executing will take hard work, visionary thinking, and cooperation.