International Music Managers’ Forum secretary general Peter Jenner’s second midemnetblog post – a call for “a new bargain to be struck between creators and the public” – comes as Robbie Williams announces his refusal to work for his label, EMI, in protest at its new management. Here, like fellow MidemNet blogger Ted Cohen, he suggests a levy on ISPs as a solution to the industry’s woes. Read on…

Payment for recorded music has become voluntary, and it will become ever more so as time goes on.

Music is an essential aspect of our human existence, virtually a human right in that when we see people deprived of music, oppression is usually not far removed.

Traditionally accessed via concerts and performances, radio, jukebox, and hard carriers bearing recordings, music has historically been relatively easy to control even when the means of reproduction have challenged the existing music business. Player pianos, electricity, radio and the changes in physical sound carriers have all forced radical changes, but essential music business structures have managed to adjust after the adoption of new business models and the passage of some time.

The digital technologies that became ubiquitous in the early 21st century however, have made the recorded music industry descend into panic. After spending decades controlling the ways people accessed and used recorded music, and succeeding, the traditional industry is being forced to admit that it no longer has that ability. The control of the expensive processes of recording, manufacturing and distributing music, a classically capital-intensive ‘Fordist’ process is no longer essential. Digital technologies and the internet have brought about these changes, both from the point of view of the creator and that of the user.

The digital revolution has fundamentally transformed all the processes of the traditional recorded music value chain. These technologies have made recording easier and cheaper, and made the distribution and manufacture of those recordings cost almost nothing. Promotion and marketing has morphed as well, creating the possibility that we have entered a business environment dominated by a mass of international niche markets, rather than a world of national mass markets (though the mass market will probably survive, but as a smaller proportion of the total market). Radio, film, video and TV are all also going into flux, along with the newspaper/magazine industry, advertising, and all the other industries which have been based on the monopoly rent derived from copyright and intellectual property laws.

Maybe the most interesting question is: what remains the same? Clearly the two essentials for a music market remain the same, the creators and the audience (though they are starting to blend into each other with the rise of user generated content). What certainly has changed is the way that recorded music gets from the creator to the audience, and how it is paid for. This fundamental change is affecting the whole structure of the traditional value chain, and the consequent distribution of revenue between all the various parties who make up the industry.

There can be no question that this process has already begun, and is the cause of the pain within the industrial, retail and distribution structures. Simply put, all parts of the music industry must now fight for their survival, either rebuilding their business models, finding new ways of serving the creators and the audience, or die. The music business does not have a divine right to exist. It must be willing to negotiate and work with any business or industry that might want to use music and provide access to music to their customers. Music-related businesses need to actively pursue new opportunities for growing both their own businesses and those of the new players in the modern global economy.

Despite the growth in legal digital music businesses there is no chance that these services will, in the foreseeable future, replace the decline in the traditional business (CDs etc). There is no way to stop the growth of either unauthorised services or the unauthorised use of music.

The fundamental nature of the new technology – the replication of digital files cheaply and easily – cannot be controlled in the same ways as the traditional music business was controlled. Trying to control these activities will have no other effect than to the wart creativity, entrepreneurialism and cultural diversity, and worst of all delay the development of new business models that work with the technology rather than against it.

The music industry of today can, perhaps, best be described as a three-dimensional chess game where multiple strategies are simultaneously unfolding between creators, consumers, investors in music (record labels, publishers, etc), residential and wholesale broadband companies, mobile phone networks and a variety of other entities that populate the supply and distribution chains of the music business. All of these old and new groups are trying to cope with licensing regimes and customs that are totally unfit for the new reality. The arcane and complex rights issues on which the whole industry has built itself make no sense to the new players. The historical antipathy and baggage that all the sectors carry around with them, combined with their desire to protect their existing businesses, has had the affect of completely frustrating anyone in the new digital distribution business trying to build a new 21st century business legally.

All these groups have different interests, goals, requirements, social and cultural relevance, histories, etc… What links them all however is that they play some role in connecting creator with consumer, even in a market where the supply chain for music has arguably failed.

How can we rebuild the supply chain of the music industry?

A solution based on actual consumer behaviour is needed, one that allows access to music in a way that addresses how people engage with music today. A seemingly reasonable solution looks to be a system where each customer with a broadband subscription, whether at home or via their mobile phone, would pay a small monthly fee to compensate creators and rights-holders for any unauthorised use of music tat might occur via their subscription. This Access to Music Charge could be an indemnity, for networks and customers, against being sued for the unauthorised accessing of copyright protected music.

This fee could be low as, say £2 per month (€2.67) and be introduced as part of the bundle of features offered by the networks. The price should be negotiated by the music industry with the broadband and telecommunications companies and subject to renegotiation from time to time. A ‘feels free’ solution such as this makes sense for all parties and has the added benefits of making piracy economically unattractive as well as making the consumption of music free to consumers at the margin. The substantial potential new revenue streams for creators cannot be ignored and neither can the possibilities for developing faster broadband connections and more interesting value and service propositions to the public.

The music industry should be expected to distribute this Access to Music Charge income, and every effort should be made to work out simple methods of allocating the funds in a way that reflects the relative frequency that any piece of music is accessed on each network. The responsibility would then rest with the music industry to work out amongst the stakeholders a mutually acceptable way to allocate the funds to the various rights-holders and creators.

Regulatory oversight might well be necessary to ensure that all parties who make up the creation and supply chains behave in a reasonable manner though it would be good to think that all parties could behave in a reasonable and mutually respectful way.

A new bargain needs to be struck between creators and the public. Essentially, we need to go back to the driving forces that initially developed the copyright and intellectual property regimes that make up the bedrock of the capitalist system that we live in, namely by finding methods that reward the creators of intellectual and cultural goods that the public values. If we do not address the problems facing the recorded music industry in the UK, it will not be long before the film, games and software industries of the UK meet a similar fate to that which has befallen the music industry.

Clear, sensible and decisive action is desperately needed to allow us to build a new foundation for the recorded music industry. If we are successful there is a bright future ahead in the digital world, encompassing many new business models and creative opportunities, failure to do so could lead to the British recorded music industry going the way of many British industries that we have seen shrink from
their former glory.


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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    Great piece. Re ISP fees or subscription models – has anyone asked musicians what their thoughts are on these models? In everything I’ve read about it I’m yet to see a musician’s input – except David Byrne. If a new deal is to be made between consumers and creators, then it will need the buy-in of ‘creators’ to convince consumers, who can vote with their $. The perception that musicians support it will help. Hopefully they won’t use Metallica this time!
    cheers and best wishes

  2. Avatar

    You’re essentially describing what in France is known as the “Licence Globale”, which was happily shot down back in 2006 with the support of many of the recording artists themselves, in what was probably the greatest “shoot yourself in the foot” session of this industry, even though it had quite a few of these already.

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