New Head of EMI Says 'Embrace Digital Music or Die'

no0b writes "Guy Hands is the new head of EMI, Britain's largest music publisher. Hands has come out publicly with a statement warning the industry against something music listeners have probably understood for some time. In the words of the Telegraph article, 'the industry will not survive if it continues to rely on CD sales alone.' More from the piece: 'With both new and established acts now capable of making money without the backing of a big company, McGee says record labels are being left out of the loop. He scoffs at their efforts to make up lost ground by developing into "multimedia entertainment companies that can manage bands and share in live income". But try they must. Revenues from record sales in Britain have dropped by more than £130m since 2004. The true cost to the industry could be far greater. TNS, the market researcher, looked at the spending habits of file-sharers between 2003 and 2005 and estimated a £1bn loss to the country in retail spend.'"

Comments

Too Little Too Late

[MightyMartian]

The record industry has spent decades reaping vast profits, often screwing over artists in the process. That business model is now dying, I think this is all too little too late. In the long-run why would artists want to sign contracts with record companies when they market the music themselves?

Have fun with those lawsuits, they're your swan song, record companies.

Re:Too Little Too Late

[thatskinnyguy]

In the long-run why would artists want to sign contracts with record companies when they market the music themselves? Sure when bands turn into household names. But the unknowns who lack the resources to promote themselves on a national/global level need a record company with resources to do so. Sure there are things that small bands can do to reach a global audience. But when was the last time you heard of a band selling-out a stadium that had a popular MySpace profile and no record deal?

Re:Too Little Too Late

[MightyMartian]

Sure when bands turn into household names. But the unknowns who lack the resources to promote themselves on a national/global level need a record company with resources to do so. Sure there are things that small bands can do to reach a global audience. But when was the last time you heard of a band selling-out a stadium that had a popular MySpace profile and no record deal?

They need a marketing firm, or hell, someone willing to put a link to their MP3s from a popular site. I could see a guy like David Bowie popping a link to a band he thinks is great on a site where he's putting out his own MP3s.

Re:Too Little Too Late

[Original Replica]

But the unknowns who lack the resources to promote themselves on a national/global level need a record company with resources to do so.

The same could be said about any other fledgling business. The steps to national or global success are gonna be the same. Start locally and deliver a good product. Get a loyal fan base going and then grow into a regional band. Keep making good music. When you've been making good music for a decade or three, then you will be able to stadiums the way the Rolling Stones or U2 do. I think we will be culturally richer (aka much higher quality music) if there are more regional and local bands and only the truly talented veterans are national or global fare.

130 million is nothing

[gilesjuk]

In the UK we're struggling from huge consumer debt and massive house prices, 130 million can be the loss due to people not bothering to buy CDs simply because they need to pay their mortgage and debt off.

If the music companies were feeling the pinch they wouldn't be making expensive music videos.

That's a 1bn GAIN to the country.

[Anonymous Coward]

Seriously, the music industry are gross committers of the broken window fallacy - that we should go around smashing windows so glaziers are well-paid. If people get something cheap or free, they're better off. All human progess corresponds to greater economic efficiency. Intellectual monopoly rights are hangovers from before 20th century economic science proved they're a spectacularly bad idea.

EMI gets it...

[jawtheshark]

At least in my opinion. I stopped buying iTunes songs that were protected after that EMI and Apple introduced the Plus songs. If it isn't plus, I won't buy it. That simple. I have a playlist called "To Buy" in iTunes. It contains links to songs I'd like to buy but that aren't Plus. I review them from time to time if anything has changed. Never happened, tough shit for them. If I find a Plus song that I like, I buy the whole album, just to support the idea.

All songs before I started boycotting non-Plus songs, have been cracked with Hymn.

I don't want to do illegal downloading, besides it's a pain in the neck. Give me an easy way to download and honest prices, and I'll be happy. I can't be alone.

CD isn't digital?

[Anonymous Coward]

shouldn't the title read "embrace internet distribution of music, or die"?

Well, what did they expect?

[Animats]

It took the recording industry an amazingly long time to figure this out.

On top of their distribution problem, the recording industry has other problems. The rock music part of the industry is endlessly recycling decades-old music. The hip-hop/rap/urban component has bands with a very short commercial lifespan. (Rap band members tend to get shot, too, but that's a separate problem.) Folk is dead. Classical is tiny. Country really isn't that big; the Dixie Chicks are more successful since they quit country.

The top two stories on Billboard this week are about litigation, not music.

Fundamental problem: the industry spends far more on promotion than on making the stuff. Any business in that position can be undercut on price.

About time

[HangingChad]

The other day I was looking for a song that's been off the air for some time. Finally ended up going to eBay and buying the CD, which was the effort of least time. It was an artist with the Sony/BMG label. If their library were online and I could download a high quality MP3 for a buck, I'd do that just to save myself the time hunting around for the CD.

It's like the music business is being run by the Bush administration. They couldn't screw it up any worse if they planned it. First they sue their customers, always a way to win the hearts and minds. Then they try to wrap everything in DRM and license yet another company to distribute it. The user has to figure out which company is distributing that label, then which operating system/music player you have to have to play their music. Then hope they don't pull a Microsoft Plays For Sure on you and drop support for the old format.

There are too many good alternatives for artists to go straight to the consumer these days. The old record companies take everything from the artist and give very little back. I think the EMI guy is right. Either start providing value to artists and consumers or f'ing die and good riddance you greedy, cocaine laced fucktards.

Here's how they can survive.

[Entropius]

1. Offer unencumbered mp3/flac/ogg/whatever downloads as their primary product at a reasonable price. This is below $1/song.
2. Tell the customer exactly where their money goes: "Out of every download, $.30 goes to the band, $.10 goes to the people who operated the recording equipment..." People will buy music from bands they like if they know they're actually supporting the band.
3. Save money by cutting marketing bullshit. Market music by selling *good* music, not by convincing 16-year-olds that they'll be cool if they listen to XYZ.
4. Diversify. Rather than trying to "produce" some canned pop "product" that they can sell to everyone, recognize that people's music tastes are often pretty eclectic, and their catalog needs to match that.
5. Stop trying to make obscene profits by underhanded dealings, and be happy with a sustainable business. Recognize that you're a middleman, and that you succeed by being as transparent as possible.
6. Cut the compression bullshit. If I want my music to sound louder I'll turn up my speakers, thanks.
7. Operate anonymous tip jars with a known cut (65% to the artist/35% to us, or whatever), and encourage people to download music via bittorrent or whatever and then donate to the artist. People will use them.

Re:Here's how they can survive.

[mc moss]

The problem is, marketing the next pop sensation or fad (such as emo or "gangsta" rap) to 16 year-olds is pretty much a guaranteed way to reap in huge profits since they have so much disposable income (the parents take care of necessities) and are feared that they won't fit in or be cool if they don't like what's popular and what they're peers like. I found that people that have a more varied taste tend to find the kind of music they like whether it is a independent record shop or online.

Loss in retail spending?

[Timtheenchanted]

It's amazing how well polling organizations can misinterpret data. The spending wasn't lost, it just didn't go through the record companies.

Some Romance is Gone

[Anonymous Coward]

I know this is Slashdot and we're all supposed to be computer nerds, but..

I think theres a romance inherent in going out and buying a new album. In waiting at midnight for it to come out. In discovering an old vintage album in your Grandparent's attic that shows they listened to stuff you love too.

With downloadable instant-click gratification, all this is a thing of the past. A little bit of the music lover's heart just died. :(

The LIE that few spot

[Anonymous Coward]

I am a person, I got an income of 1000 dollars which I spend completly every month, 600 of which goes to fixed expenses like housing, insurance, taxes and other mundane stuff that you have to pay. Two hundred I spent on essentials like food, clothing, phone, etc. That leaves 200 to spend on fun. Lets say that before filesharing I spend that 50 dolllars of that 200 on music, now with filesharing I don't.

How much money has been lost to the economy because of filesharing?

Not a single penny.

If you don't understand why, you are an idiot, stop reading, american idol is probably on, if it ain't watch the static.

To everyone else offcourse it is obvious, I spend ALL my money in the economy, it does not matter to the economy WHAT it is spend upon. If I don't spend it in shop A I spend it in shop B, shopowner A may not like it but the economy doesn't give a shit, as long as I spend.

Now if you were to present me with figures that show that people nowadays are saving more money then before, then you might have a point, if teenagers start putting their allowances into banks instead of CD's then the world might indeed come to an end (although I am sure an economists could explain how this too would just be another way of spending)

Simply put, although I haven't bought a CD or a DVD or even a game in ages, that doesn't mean I don't spend money, turbine has large faction of it with my lifelong LOTRO copy, Blizzard got maybe a half-dozen full games sales out of me with WoW. The record company doesn't sell me CD's but I pay several CD's worth each month to my ISP.

They talk about money flows sometimes and that is just what money does, it flows like a river and sometimes that river changes courses, leaving one area dry and flooding another. It is part of live. We spend less on coal and more on gas. Once we bought hay, today we buy petrol, tomorrow, who knows, but there always be a inn/service station beside the road selling fuel, not just for our mode of transport, but ourselves.

If you really want to talk about lost money to a countries economy, check where those CD's are made. I can bet you a lot of money it ain't the US of A or Great Britian or wherever. It is china. Now putting ALL that manufacturing in low wage countries, now THAT hurts the local economy, to the tune of far more then a handfull of billions. Why don't we hear the music industry about that eh?

Wanna see proof? Go into an archive and look at pictures of your local highstreet, see how one type of store just gets replaced with another over the years. I am willing to bet that your local music store is now housing a mobile phone store. That is what people spend money on nowadays.

see: Phish

[opencity]

Sold out stadiums. Had a record deal as a side project. Also Dave Mathiews. Anyone remember the Grateful Dead (man)?
Not a fan of above, don't mind early Dead, but I'm just sayin ... Later, see: Wilco. Anybody who ever ran a minor label will tell you promotion is almost always a waste of money. Too much noise out there. It was like political contributions. Unless you came in at the highest level, full pages in Rolling Stone (and that conincidental long story in the next issue), you were wasting your money.

There's no money in the business for anyone anymore except the players.
(the sound of players worldwide laughing)

But ... 20th century media was an employment machine. While I personally get a kick out of the image of power hungry lawyer / label wanna-bes saying 'you want fries with that', there were a lot of support jobs that were honest work: Record Store clerks (insert joke), audio engineers, ... uh, that's about it. The other honest jobs in tour support are still needed.