Illegal music downloads hit record high - Telegraph

A good read from the UK Telegraph.
Link: Illegal music downloads hit record high - Telegraph.

Some of my favorites:   "Four out of every ten social network users have music embedded in their personal profiles, rising to 65pc among teenagers. Russell Hart, chief executive of Entertainment Media Research, described this phenomenon as "the democratisation of the music industry... "Social networks are fundamentally changing the way we discover, purchase and use music," he said. "The dynamics of democratisation, word of mouth recommendation and instant purchase challenge the established order and offer huge opportunities to forward-thinking businesses."

My comment: You can say that again! Yet, I don't see a concerted move from the labels to just offer a default license for the use of streamed tracks on these networks, in exchange for a share of revenues. This sounds like a great job for the PPL, or Soundexchange - but once again, the only thing you hear from them is that they don't have the mandate for this, and on and on and on.  My prediction: on-demand streaming of each and every song will be offered, licensed or not (more likely, NOT, since there are already 50+ apps that do this without a license!), on all of these networks (and there are already approx. 750 of them, estimated to grow to over 5000 within 12 months), and if the labels think they can just deny this license by their usual 'permission not granted' approach, in order to extract larger sums of $ out of the market, they will just put another nail in their coffin. Because today, non-participation means that everyone just routes around you!

"There has been a significant increase in the preparedness to download illegal music by teenagers and people in their 20s," he added..With margins on CDs declining while the growth of legal downloads slows and piracy rises again, the music industry is under pressure to find better ways to distribute its content. John Enser, head of music at Olswang, said: "The music industry needs to embrace new opportunities being generated by the increasing popularity of music on social networking sites. Surfing these sites and discovering new music is widespread with the latest generation of online consumers but the process of actually purchasing the music needs to be made easier to encourage sales and develop this new market."

My comment: The biggest trend here is ACCESS REPLACING OWNERSHIP. People go to those networks and LISTEN before they will consider buying anything (IF the buying of digital music was even attractive which it is clearly not, right now).  And THAT needs to be monetized. Incidentally, that's what I am shooting for with Sonific..!

Comments

[Gerd Leonhard]

Lucien: totally agree that the writer and artists should get paid but the problem is NOT the unwillingness of those networks to pay them, but the fact that the artists' representatives (label, publishers, societies) have not seen it fit to offer a model under which they COULD be paid, yet. All we have right now is a collection of totally outdated licensing theories that are useless for most of these new networks. I shall elaborate further!

[Lucien]

Gerd, I have a question: Don't you think it's unfair that companys like youtube, myspace etc. don't pay for their use of music? I mean, their business model is based a lot on the attraction of users by popular music! So the music publishing houses and the artists should be payed for that! Of course, for the artists it's a great thing that there is something like myspace. But it's also a great thing to be on television, or to have a song in an ad. And those companys pay as well!! So to remain in your model: Think of myspace, youtube etc. as the artist's (or their publishing house') business partner, it's all b2b! all the best, Lucien

[Gerd Leonhard]

Jon, there is no disadvantage to being small in this new system - only to 'remaining obscure'. There is a bit of darwinism here in that no matter how big or small the label is it will ALL be about how great the music is, ultimately. Not Content is King but GREAT CONTENT is king.

[Jon Satterley]

Out of interest, how do you think indie labels (such as Roadrunner...or even smaller music companies) might fare in a share-of-revenue approach to music accessed via social networks? Surely the percentages for the little guys would be so small that it would make traditional performance income look like a king's ransom? Obviously the amounts people would be prepared to pay would be fairly small where they are already getting it for free, so a small percentage of an already small pool might not mean much. Or maybe the pool wouldn't be small if 30,000,000 Facebookers were all paying..? But is that feasible?