2008 was a year of retrenchment and experimentation in the music industry.Many companies cut staff while at the same time more that 200 music startups were launched according to Music Ally. As we look ahead to 2009, three trends – democratization, data and monetization – are dominating the conversations creating the new music industry.

Here is a look a those trends and some companies that exemplify them that I will be watching closely in 2009:

  • DEMOCRATIZATION – It’s about giving entrepreneurs, artists and fans the tools to compete with the major labels and Topspin Media is one of the leaders. They’ve already graced the cover of Billboard and helped launch new music by Byrne/Eno, Paul McCartney and others. But I’m betting that Ian Rogers and crew didn’t come together just to build a better digital delivery system. Plus the real fun will begin when Topspin finally opens their platform to a wider audience and creative artists and labels show just how much they can do with it. Honorable Mentions: Project Playlist and all the services democratizing music discovery. Record labels need to figure out how to work with them instead of suing. Also Sonicbids, OurStage and others working to democratize live music. Tunecore gets kudos for all access flat rate digital distribution.
  • DATA – How do you know what’s actually working? Where are the fans coming from? What avenues lead to sales? Two companies bear watching in 2009: one new and the other old but trying to remake itself. Band Metrics will debut at MidemNet (Disclosure: I just joined the advisory board.) It’s all about crawling the web, crunching the numbers and providing actionable information. EMI.com is part of that venerable label’s effort to remake itself. So far, I not impressed, but there’s an strong new digital team and the concept behind the re-launch – observe fans online and gather data – is spot on. Honorable Mentions: ReverbNation, Music Todays fan ticketing platform and others who help artists gather and use fan data.
  • MONETIZATION: Any company that doesn’t effectively deal with monetization both for themselves and for rights holders may not make it to 2010. In a slumping global economy,that means looking beyond ads for revenue and lowering the expectations of investors as well as labels and publishers. I’ll be watching MySpace, YouTube, imeem and We7 to see how social networks, video, music discovery and ad supported music respectively work to improve income.
  • THE WILD CARD: Bapapoo. Is it lawful to sell a “used” mp3 that you legally purchased? The courts will inevitably be called on to decide and the result could re-value downloads and effect consumer confidence.

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  2. It will definitely be interesting to see what happens to Bopaboo, for instance it is clear in the iTunes terms and conditions that items are licensed to the end user, not sold, and indeed are not transferable, I am sure all the other digital stores have the similar T&C’s. So the only other source from which the products sold on the site as secondary market products could only have come from an illegal source surely?
    Being in Europe I couldn’t check out the Bopaboo service, but this is an operation that surely is legally doomed. Whilst its near impossible to stop the resale of used CD’s on Ebay (which is technically the same illegal secondary market transaction of a license) if Bopaboo do succeed to win a case, would that then open the doors for sites like eBay to allow users to list secondary market MP3 files?
    To be honest not only are they legally doomed, its a commercial non starter too. Would end users seriously want to buy a second hand dodgy copy of an MP3 for half price when original downloads are under a dollar / euro? (no broken jewel cases / dodgy printing I suppose :-/) Who is there target market? Those who pay for music will pay for the iTunes / original trusted downloads, those who use P2P wont, I just dont see a market inbetween…
    As for 2010, I think we are entering a very very interesting stage of the new music industry, and as hinted to by Phil Hardy in a previous post, the next 5 years of the new decade are going to be an interesting one for artists, professionals and everyone involved in the new music industry…
    I for one am looking forward to it very much…

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