The business of music has long been beholden to human technological capacity, particularly the ability to record and distribute performances on a large scale. Since mainstream adoption of vinyl records, the value of music has increased exponentially with each advancement in distribution technology (i.e. cassettes, CDs, MP3). But as artists have become dependent upon traditional studio recording, they have been forced to concede a significant amount of control to record companies that are driven purely by profit motive.Humans have advanced tremendously since the early days of recorded music, and the prevailing technologies of today are in prime position to power the music business of tomorrow. Before the technology existed to record music and sell content as a physical product, the music business was necessarily a service industry: those in the music profession made their living performing, teaching, or writing commissioned compositions. However, once music was transformed into a tangible product which could be sold, it became the lifeblood of the music business. (Kusek and Leonhard, 2005)
At least two rock legends understand the realities of the digital age. In a profile piece written by the New York Times on Peter Gabriel (right), former lead singer of Genesis and aspiring new media entrepreneur is quoted saying, “Technology has always shaped music, be it 78s, 45s, LPs or CDs, it changes the shape of the music. With downloading, the artistic change hasn’t really hit yet. But it’s turned the economic model on its head. The major record companies have some smart people looking at digital models. But the question is, will the people at the top be willing to turn the business upside down?”
"In the past, music was something you heard and experienced — it was as much a social event as a purely musical one. Before recording technology existed, you could not separate music from its social context. Epic songs and ballads, troubadours, courtly entertainments, church music, shamanic chants, pub sing-alongs, ceremonial music, military music, dance music — it was pretty much all tied to specific social functions. It was communal and often utilitarian. You couldn't take it home, copy it, sell it as a commodity (except as sheet music, but that's not music), or even hear it again. Music was an experience, intimately married to your life. You could pay to hear music, but after you did, it was over, gone — a memory."
While Byrne is lamenting the idea that music has become something typically bought and sold as a recorded commodity and not as a performance art, he himself sells CD's and DVD's of some of his live shows on his website. The basic message I take from Byrne is that music is meant to be experienced live, because only then is it truly appreciated and honored in its natural form.
Until recent developments in software and network capability, limitations of distribution technology have prevented live Internet streaming media from growing into a business that makes sense for performers and content owners. However, what if every musical performance (concert) was broadcast live on the band's website with associated sponsors and targeted advertisements? Isn't that the same model used by artists and promoters to monetize live shows already? What about making the video available for free post-live to those who attended the show, or even selling a digital copy to fans of that particular band through iTunes or Facebook? Sounds like the foundation of a new business model for the music industry...
Legal P2P Live Streaming Media
Peer-to-peer (P2P) file sharing and digital media formats have thrown a wrench in the previously undisturbed machinations of the major recording artists and the business model of the major record labels. "Millennials" (aka Generation Y) are younger and less familiar with the idea that music is an “intellectual property” protected against unauthorized distribution. Millennials prefer an open environment where copyrighted content is shared and enjoyed by all without restriction or the fear of becoming an example in an increasingly litigious marketplace.
P2P-powered file-sharing, and to a growing extent YouTube and similar video sharing websites, have created a vacuum in the music business for which artists and publishers ("rights holders") have instinctively turned to litigious remedies, rather than concentrating on innovation. Musicians not exercising their legal options to recoup revenues from YouTube, which promises 50/50 revenue share with rights holders, have instead chosen to give Google some time to work out its internal monetization strategy before exploring legal options.
Avril Lavegne's (right) music video for hit single "Girlfriend" has largely been acknowledged as the most viewed video in YouTube's brief history and the first to top the 100m views plateau. According to Avril's manager, Terry McBride, YouTube's own policies leave him to estimate that the 200m+ views generated by the young Canadian artist's copyrighted content through the video sharing portal entitle her to a check for about $2 million. Needless to say, McBride doesn't expect this payday to be realized anytime soon, or anytime in the next 2-3 years at least. It also goes without saying, artists are going to increasingly view new media outlets and social networks like YouTube as more than simply viral promotional outlets, but rather as additional sources of revenue. When it became clear that the record industry is not afraid to take even teenagers to court for illegally downloading music from nefarious file-sharing sites, it also became clear to all a new vision for the future of the music business is long overdue. These "illegal" web services (i.e. Napster) are powered by efficient P2P distribution software, which allow users to quickly and efficiently share media on the Internet, and unilaterally decided the laws protecting copyright were meant to be broken. Over a century since music shifted away from its core value as a pleasant experience for whom it was preformed, it seems as if the industry has come full circle and digital distribution has brought services back to the fore in terms of revenue streams for artists selling their "product" via the Internet.
Alas, SMV is founded on the calculation that it will be the very same technology which was once thought to spell the demise of the music industry, P2P multicasting, which will provide musicians their greatest opportunity since FM radio. Distribution of high-quality digital video over broadband offers musicians in particular a tremendous amount of leverage in charting the course of their own futures, freeing them once and for all from their dependence on record companies and CD sales to make a living.
Music as a Service (MaaS) Model Emerging?
The major record labels have been living in denial of the coming digital revolution. Artists have largely failed to take advantage of the current lapse in vision and obsession with traditional copyright and litigate strategies prevailing among executives at the major recording labels, but one artist has stepped upon the soapbox and assumed the role of evangelist-peacemaker: Peter Gabriel. “I don’t believe in the death of the major record companies,” Mr. Gabriel says. “But as an artist, I’d love to see them reinvented as service companies.”
Very intriguing proposition Mr. Gabriel...
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