The Music Industry's coming transformation

Peter Jenner who managed Pink Floyd, and is now Secretary General of the IMMF, talked very clearly about the deep business problems facing the music industry in The Paris Accord session at WOS4 here in Berlin. Peter Jenner is a very likeable speaker, happy to make fun of his own computer ignorance, which reveals a deep understanding of the music industry and what it is facing. If I can summarise what he said - semi-officially only as he was careful to point out - real simply: the music industry's business model is doomed. Sales of music this year will drop 25%, attacking grannies and children by going to court is nonsense for a media business. The music industry that was built on shipping plastic has to adapt to the disintermediating power of the internet. Everyone can now publish their own CDs. So what should it do?

The suggestion was that having consumers pay for access to all music that ever existed for a limited fee would generate more revenue than the industry currently makes: $50/year \* 500 million people = $50 billion dollars/year. This would remove in one stroke all piracy, would still allow for sales of plastic CDs in beautiful encasings at a high collectors price, and would in the end give a new role to the managers and intermediaries who would now be very much needed to help people filter the absolutely humungous amount of available music (and this is indeed the business model of the many new netlabels). Various methods to then pay musicians in proportion to how much they are listened to are being worked on. Certainly a very interesting idea.

Comments:

I too am looking forward to the day when music 'flows like water'. There's an interesting book that describes this future: The Future of Music. It's a good read.

Posted by Paul on September 17, 2006 at 06:19 AM CEST #

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