Remake, Remodel: The Evolution Of The Record Label

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Brian Message feels strongly that more risks could be taken and supported (by the
industry).
‘The risk-averse, short term focused, almost business affairs driven agenda of many
organisations has been a material problem in our industry,’ he says, ‘especially when it comes
to the digital world. We need to be more dynamic. Do your model, put it out there. If it’s not
right, you’ll learn what needs to be fixed, so then fix it. Get off the launch pad and make it up
as you go along. I still can’t quite believe that the artist recording contract has evolved little
from that used in the 1980’s, yet the marketplace has evolved beyond recognition.’
For a while, price was dominated by iTunes’ fixed prices of £0.79 and £0.99. This lack of
flexibility was felt to hold back growth, and lately price experimentation has been more
common (both higher prices for in-demand tracks and lower prices to push catalogue).
On top of this, eMusic offers bundles of downloads in return for a monthly subscription
while Amazon tactically moves prices up and down. Today, subscription services offer a
whole new articulation of pricing.
The release of In Rainbows by Radiohead in 2007 was a radical experiment in value and
pricing. Consumers were invited to set the price they pay for the digital download,
delivered via the band’s site from release date. However, they were also able to pre
order the album in a deluxe physical format for around £40, or await the conventional
CD release (distributed through XL Records in the UK) for the more conventional price
of around £10. Subsequently, the digital album was made available through iTunes for
£7.99.
‘The era of free music has increased music consumption dramatically, but we are going
to receive less per unit of consumption,’ says Martin Mills. He believes this gives greater
scope for price flexibility.
Brian Message believes that licensing needs to be opened up further and identifies that the
inability of rights holders to act collectively, partly because of competition laws, as holding
them back in negotiations with service providers. He also believes there needs to be a mind
shift away from seeing copyright as an instrument of control in the digital space as control of
copying is impossible. Rather, the focus should be on copyright as a remuneration right,
much as in the licensing of radio. He proposes a collective licensing solution to correct what
he believes is market failure in the digital music market.
‘Rights holders don’t know the possibilities and the potential money to be made out
there in the digital space,’ he says.
Alison Wenham has a similar view when she says, ‘The lack of innovation in licensing
continues to be a problem and could be holding back new services and the market.’ 35
Doubts over the potential value derived from digital services can also be a barrier to
growth as new services suffer from either lack of investment or lack of licensed product.
35 Celestial Jukebox May 2008 – MusicTank – last accessed 09.05.11
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