Lions, dinosaurs and elephants: surviving music industry’s wildlife

By Erika Astudillo

Judging by the metaphors used by participants at Spot+, the first edition of the business oriented event part of Spot Festival, the music industry is a wildlife. If, on the one hand, performers, songwriters and labels once seemed to be coexisting in peace, streaming services came out to disrupt this food chain. To stream or not to stream was not the question anymore, but rather how to create a win-win business model for artists, companies and the audience, avoiding the extinction of music consumption as we know it.

Labels: no longer the king of the jungle

Before the year 2000, labels were considered the ‘lions’ of the music industry. “They were the kings that thought they controlled everything and couldn’t see that the world could be different”, said Lasse Lindholm, head of Communication in IFPI, and one of the speakers at the panel about Label’s perspective at Spot+ discussing the development of the music industry in Denmark together with Internet use to get free content.


When free on-line content service platforms started to develop and people started to access music without paying for it, Lindholm said, the label’s reaction was to think of it as a “consumer’s problem”, not theirs. And this point of view, according to him, made labels become the ‘dinosaurs’ of the market. The role of labels is not to sell CD’s anymore, he explains, but to “help develop music and make sure that the music is available in the right format for the consumers”.
This new business model poses a challenge to everyone who is part of it. Morten Hjort, head of innovation of Universal Music Denmark confessed that there is not an established business model and that it is not easy for small labels to enter to the market. Hjort added that this scenario seems hard to make a living out of music.

“I would make more money if I was working at McDonalds”

From the perspective of songwriters, life in the music jungle has become more difficult with the introduction of streaming services. Helienne Lindvall, songwriter and journalist from The Guardian, says that the definitions of share of revenues between the artist, the labels and the streaming companies is still confusing. “Songwriters are in an inferior position. We are not talking about having a minimum wage but if you have a song that is being heard by millions of people, you should have an equivalent share of revenue.”, she said. “We are not properly legally represented. The major label will earn more than the small ones”.

The need to reach an agreement about the percentage of share for performers and songwriters was also pointed out by Crispin Hunt, songwriter and producer from London. He described the situation of songwriters in one sentence: “I would make more money working in McDonald’s than I do working in this industry”.

YouTube or “the massive elephant in the room” as Hunt called it, has to be taken into consideration too. “It has 70% of the world music consumption”, he said. “And at the moment there is no right for writers (to get paid) if their song is embedded in a film”.



All together in the jungle of business

Instead of only thinking in the drawbacks of streaming and free content, it is important to look at the advantages of it too. Hjort mentioned at least four: it allows access to a global market and at the same time it is possible to give personalized content to the audience. Streaming give high value for the user who thanks to it can get music without spending much money on it and today, artists can have a voice in the negotiations. Hjort said that these advantages should be taken in consideration when thinking in marketing strategies to sell music.

Despite the many disagreements over solutions for the area, there seem to be one common agreement: when it comes to business, “we need to get educated. Music creators need to get educated to be able to speak out, including learning how to fill up forms”, claimed Lindvall. “We got to get control of our situation. If we want to make a business we got to get the industry by the balls”, Hunt concluded.

 


Erika Astudillo is a journalist from Ecuador doing the first year of her Master’s program in Journalism, Media and Globalization in Aarhus and is a contributor for Jutland Station.