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Now artists can promote themselves and sell their music directly online, why should they need labels? Moreover, why shouldn’t they just give it away for free? MidemNet 2008 speakers addressing these thorny issues include Steve Purdham (left), CEO of We7, a Peter Gabriel-cofounded venture offering free, ad-supported music; and Thomas Hesse, president of Sony BMG‘s global digital business… who go head-to-head here for the MidemNet blog!

Hesse’s overriding message is simple: the majors will survive, and indeed flourish in the new music business environment, because only they have access to all the necessary channels. “In this new world of multi-product releases across the whole world,” says Hesse, “the label manages the release of these products over an entire artist’s project. Now, sales and marketing are so inextricably linked, you need to ensure everything is incredibly well integrated; this is where the major label becomes invaluable. We love MySpace, but it’s only one channel amongst others. A good marketing campaign is multichannel; and as a major, we already have links to all those outlets.”

“Most of the majors will survive, but they must change; really
change, not just talk about it,” says Purdham, who cites
major-supported free music venture and potential We7 rival SpiralFrog
as a “portal with very little innovation” (“who wants music you can’t
play on your iPod, can’t share and will lose if you don’t reconnect
each month?” he adds). For Purdham, majors “have to get rid of the
arrogance that only they give access to all the channels. New models
and players such as Live Nation
[who recently signed Madonna] prove this is not the case.”

That said, it’s not because We7 offers free music that Purdham thinks this is the only way forward. “The real way forward is the dismantling of traditional and archaic business models which are restrictive for most artists, to a future where a wide spectrum of flexible, non-exclusive business models co-exist. The new models, such as ours, will be driven by the consumer rather than the current ivory towers.
I believe consumers will want the combined choice of pay, subscription
and free depending upon whether they are collecting, discovering,
sharing or devouring the music they want, in a form that lets them play
on any device.”

For his part, Hesse claims to have already made great strides in terms of exploring new models and products. “In the US, Justin Timberlake’s last album sold 3.4m copies but another 15m ‘other’ products
(individual track and video downloads, ringtones, ringback tones,
remixed tracks and other online and mobile products…); that’s the
kind of result we want. It’s not one, but thousands of products, all
helping each other. Justin is a brand, out of which both fans and casual listeners can get what they want.”
Furthermore, Hesse insists majors are ideally placed to pick the right
products for the right artists. “In hop hop, for example, we’ve done
lots of mobile products; we’ve put indie rock artists on download
platforms… We have the experts who can play virtuoso on all these different opportunities.”

Open-mindedness
then, it would seem, is the key to progress, with or without a label.
Says Purdham, “if change is embraced, the positive opportunity for all
of us – artists, digital labels and the biggest majors – is
outstanding. This is why [as a former IT executive], I have taken that
leap of faith into this irrationally seductive industry: the chaos presents opportunity.”


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About Author

James Martin

James Martin is Head of Social Media for Midem organisers Reed MIDEM. This includes defining and rolling out Midem's social media strategy, editing midemblog, influencer outreach, developing Midem's fanbase of 75,000+ music professionals and more.

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