Jeremy Silver – The Future of Music industry [Thinking digital session notes]

Image by killermonkeys via Flickr

Music industry, and what’s going on around there. The general perception is that this is the industry in the flames. Internet has impacted music industry in the earliest stage. This is industry that believes that Sex, drugs and rock and roll is not going out of style. But they maybe missed on the style. They also don’t believe in disruptive technology.
But music is unique. Oliver Sacks – Musicophilia. His book talks about the fact that music is in the different part of our brain than language and reason. There is something ancient about it.

Music is always about the technology. Musical devices are basic technological artifacts that change the way music is created and also received.

CD’s are not selling anymore, but digital downloads are growing at 35% pa. But they’re not growing fast enough to compensate for CD’s. They are not caching up, because P2P is much more convenient to get your music.

This is a fundamental change that happened, that is undermining the institutions that music industry has created. Usual example is the notion of copyright in the mashable world.

The worst possible PR campaign: RIAA suing downloaders.

But .. at the end of the day, the music industry is still funding the artists. The net affect of all this is that the industry is in flux.

Yet it’s not all bad:

• Mobile music is growing and all the operators are launching mobile music distribution services.
• Live scene/shows are selling out. People want to go, and have that live experinece. They value increasingly the value of the moment.
• People want to engage in the music themselves. Huge shift in the selling of music instruments. (3 millions guitars bought in ‘07 in US; source: music trades). The sells of different equipment correlates with the currently popular style of music.
• Music making in school. 75% of UK secondary school is using Sibelius 5, software for music composing.

We are not the edge of disaster, but we are the edge of incredible change. It’s an explosion of all the good new things.

The new environment music industry is working:

• New talent approaching (slicethepie, sell’a’band). Both companies are leveraging punter leverages. It’s like fantasy football but with real band. You can invest 20 quid into the band and as they raise money they can get more famous and do better stuff.
• Topspin.com – it’s a cottage industry. Every artist just needs some online tools to promote yourself and they’re creating a platform for that.
• Piracy – interact and consume. Piratebay/torrents, napster as a streaming service and what Radiohead is doing in the download space.
• Discovery tools – last.fm, Pandora, AOL music etc. One llama – plasma view/their own point of view on how music connect to each other.
• Blogging – MySpace, imeem, The Hype Machine, Music Bloggers United, Digital meltdown, Dr. Schluss’s Garage of Psychedelic Obscurities

The bottom line is: there lots of new business models. This is a classical long tail market and there are plenty “Web 2.0” opportunities in music space.

While the superstars are still important, the general trend is showing that national/regional artists are growing in relative to big guys. But they are big brands, and they can talk to old media. They also work with brick & mortar stores.

There is a new interesting place: “Cutting edge obscurity”.