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Ted Cohen, TAG Strategic; chairman, MidemNet Visionary Chair Committee

Twenty-five years ago, in May of 1982, I was called into a meeting at Warner Bros. Records, where I worked in Burbank, California, to take part in the launch of a New Media group composed of Warner employees, some Atari staffers, a couple folks from HP, Bob Stein, founder of Voyager and others I strain at night to remember. At that time, I was part of Warner’s legendary Artist Development department, where the careers of Prince, Van Halen, Randy Newman and many others were encouraged, supported and nurtured. Stan Cornyn, who was a true creative visionary at WB had been contacted by Alan Kay of Xerox PARC fame (he brought us the GUI!!). Alan had left Xerox & arrived at Atari a few months earlier and delivered this pronouncement: the impending debut of the CD in early ’83 combined with the eventual adoption of the personal computer were going to have a significant effect on the future of music industry, and a profound effect on the relationship between the fan and the music.

While the computers were primitive, bandwidth virtually non-existent and storage cost astronomical, we talked about where it could go when the tech and the tools were mature. We came together to discuss the possibilities, to explore the potential and plan for the future. Well, even the best-laid plans go awry. While the tech evolved, the music industry vision did not keep the same pace. Business models remained, for the most part, stuck in time. The music consumer was changing, the music industry began to struggle, a major fall-out became inevitable.

So, we now find ourselves in a bit of a mess. Personal computers run at lightning speed, bandwidth is plentiful and you can get a terabyte for under $400. This has created the age of the empowered music fan, where whatever he/she wants is available at literally the click of a mouse. The friction is gone, instant gratification has truly arrived. In this new paradigm, the challenge has become, how do we monetize the disruption, how do we extract value out of “free”? This has become one of the main topics of debate on chat lists, on college campuses, in entertainment company board rooms, world capitols and at global forums such as MidemNet.

MidemNet 2008 is just 2 1/2 months away, it seems like it was just a few months ago that Mitch Bainwol, head of the RIAA and Gary Shapiro, the Consumer Electronics Industry czar traded their viewpoints with an electrifying passion that defines MidemNet as the place to be every January. I’m honoured to have had a hand in crafting its direction for
all nine years.

Each year, we try to raise the bar, dial up the quality, bring in new ways to elevate the dialogue and always strive to keep it real. This year, we’re going to shake it up some more.

On Sunday morning, January 27, I’m going to lead what I believe to be the first totally user-generated panel held at a major conference. Here’s how it’s going to work:

Over the next six weeks, I invite you to submit topics/issues for discussion. They can be on any aspect of digital and/or mobile music, issues that are affecting the current and future state of affairs: DRM, sideloading, fair use, wi-max… whatever you believe would make for a timely and lively discussion. Additionally, I invite you to submit yourself or others for consideration as one of the six panelists participating in this session. Your viability for this role will be judged, in part, by the discussion ideas you put forward. Three of the panelists will be selected through this process, while I will pick the other three from conventional submissions and people that I’ve identified as thought leaders.

That’s the plan, let the discussions begin. I anxiously await your input and participation.

Ted Cohen is Chairman of the MidemNet Visionary Chair Committee


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6 Comments

  1. The question of how to extract value along the value chain in the digital world poses great challenges for all.
    e.g. claiming royalities related to public performances of music played via a music web site. In a simple world this could be expressed as a percent of revenue, but a lot of successful web sites have relatively little revenue but huge amount of subscribers and therefore have baked in huge potential advertising revenue for the future. How do we extract value from built in equity? It seems to me that all forms of success have to shared with writers, whether its equity, traffic, number of downloads or streams or revenue.

  2. User-generated is cool. But where do we put the limits? I’ve seen a track we produced some years ago “illustrated” on YouTube by footage taken by the German army during World War II. Gulp! The situation is not entirely new, of course, as mash-ups have existed since the arrival of 12-inches and sampling. But it can be brought to whole new levels these days. How long before lawsuits start flying? Who, after all, would control the rights of derivative works that could be created using an instrumental crossed with someone else’s vocals and illustrated with newsreel footage? I think it is unwise to think rights owners can (and will) let go entirely.

  3. The industry has been talking about giving music users a better user experience for a decade now, doing little or nothing to accomplish that. You can’t compete with freely available material if you provide the consumer with sluggy download stores, with limited catalogue, complicated payment systems and DRM. The last thing means that the user isn’t able to use the music he/she has paid for in any way he/she like. Different standards, different devices don’t make things easier to handle, but I think it is time for the industry to adapt it’s original main objective, i.e. selling music (instead of protecting it to death). How the payment is received makes no difference, to the user it can be a premium product (like a cd), something cheaper (like a download) or even feels-like-free (tax based or paid for by advertising downloads/streamings). The most important is providing customers/users with state-of-the-art, easy-to-use services covering everything from basic artist information, concert calendars, discografies, download service with no technical restrictions, great catalogue, ticket and merchandise sales, audio and video streaming, community with recommendation/discovery features, user-generated content etc.
    Everybody’s just talking, but that isn’t helping much, who’s doing? Amazon is on the right track, but why oh why did Nokia fall into the DRM trap – they would have the muscle to persuade record companies to drop it. The potential is there… mobile, desktop, constant presence. On the other hand, Nokia Music Store is just a… store. Where’s the interaction?

  4. Almost forgot, the record companies need to work on their PR, too. Suing potential customers does not help. People need to regain the feeling that they are actually supporting the artist by buying artist’s music and merchandise, not only the fatcats in the management. Otherwise record companies will make themselves obsolete in the future.

  5. For your MidemNet panel (just back from CES), what about Internet Radio?
    More efficient and lower-cost electronics platforms are now beginning to ship. An increasing range of new Internet Radio devices—mobile, tabletop, portable, and personal—will reach markets in the next months. Initially in the UK, their global reach will supersede flagging DAB radio (and then HD radio in the US).
    Will Internet Radio be dominated by newer personal and programmed playlists and subscription brands—Last.fm, Pandora, Rhapsody, LAUNCHcast, XM…? Will traditional radio programming—commercial, public, community, student, and Internet only (with presenters and local and national geographic recognition)—be lost in endless lists of possibilities, with insufficient individual name recognition, organization, and search?
    Will establishment licensing be successful demanding Internet rates far greater than for terrestrial and satellite? Will those now paying and new entrants willing to pay be hobbled, forced out, and prevented by Internet radio rates guaranteeing continued losses? Will non-paying Internet radio dominate—off-shore if necessary?
    Darryl Pomicter
    Ressen Design
    The Radeo Internet Player
    More than 10,000 Stations, 20,000 Shows, and 1,000,000 Episodes.
    Worldwide Internet Radio—Broadcasts, Webcasts, and Podcasts.
    Wherever You Are, Wherever They Are, and Whatever They Are.
    Easy to Play Your Favorites, Find More, and Share Them.
    http://www.radeo.net

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