Berklee hosted what can only be considered as Part 1 of an online discussion about the state of the music industry yesterday. The topic drew a lot of attention and the guest speakers of the event, Berklee President Roger Brown and Dolby/Topsin Chairman Peter Gotcher, gave valuable information about some of the current trends, especially for entrepreneurs who want to dive into the dangerous waters of the music industry.
The musicians, who are sometimes viewed by the business side as 'externalities' when it comes to industry discussions, were (unintentionally) left out due to time constraints of the Q&A. The moderation of the event was a bit askew in terms of making it truly 'musician focused' -- the discussion was more about wise investments for venture capitalists and entrepreneurs who love them.
Roger Brown focused mostly on informing the registered guests about the timing of the hunt for investments. He emphasized that music entrepreneurs (who are not necessarily musicians themselves) generally harbor an independent nature and should be careful in tying themselves down to a VC group by giving up their independence/decision making capacity too soon: DIY, prove your business' worth before you ask for money, grow naturally.
Peter Gotcher has a successful track record as a music business investor and could be considered a 'dove' in the hawkish world of the lending business. His remarks were informative as he pointed out the shift towards mobile in almost all aspects of online music consumption, therefore he hailed streaming as the only relevant tidal wave for the distribution of music. He declared downloading (and MP3's) dead and encouraged musicians to explore 'other' avenues of income such as merchandising and, well, whatever else they can find.
Gotcher praised the gaming industry as a viable income option for musicians but reiterated that the music industry is not a favorable avenue of investment for venture capitalists at the moment. He warned future music entrepreneurs to tackle the issue of music licensing before showing their business plans to prospective investors. Apparently, the subject of content providers tend to be a buzzkill in VC board meetings. Both Brown and Gotcher encouraged future music entrepreneurs to consider innovative applications that make money for musicians and not necessarily just their Medici patrons.
Streaming, the new preferred method of listening to music online, now supersedes the $12-15 per CD era; without necessarily offering a viable financial solution to the dwindling income of artists and songwriters. (It may take up to 50.000 streams to match the retail sale value of one album).
A new era has taken over and the advice that musicians are given is to venture out into other fields such as merchandising, gaming and online retail marketing; instead of trying (hopelessly) to sell their music. Imagine the same advice being given to a medical professional: Perform your surgeries, but sell keychains to financially support yourself.
The pallid music catalog brokers -- otherwise known as major labels and publishers -- would probably welcome this advice as they earn more money from the backs of dead musicians than finding innovative ways of promoting new music; they love doing practically nothing but printing and ostentatiously licensing the same catalog in new formats; LP's to CDs, MP3s to streams, ad infinitum.
The pyramid scheme of the ailing music industry (even Courtney Love took action in exposing the behind-the-scenes of a record deal) is a deep concern for a lot of prominent musicians as well; Radiohead's Thom York and his decision to opt-out of the Spotify system is a telling decision of things to come. Nigel Godrich, Radiohead producer, vehemently commented on the issue: ' If people had been listening to Spotify instead of buying records in 1973, I doubt very much if Dark Side Of The Moon would have been made.'
Well, Nigel; what about Gagnam Style?