Digital Citizens – Social media and the music industry who are mildly embracing it

So the topic of the evening was meant to be Social media and the music industry but that’s not quite what we got.

The panel at Digital Citizens: Ben Shepherd – Sound Alliance; Sam Buckingham – singer / songwriter; Gareth Stuckey – Director, Gigpiglet; Dan Rosen – ARIA Chief Executive Officer; Neil Ackland – Sound Alliance; moderated by@acatinatree. The event was held at FBI Social.

Everyone talked about the revenue/rights quandary but there was no real talk of how they were strategising for the digital age. Except for Sam Buckingham, a singer songwriter who has leveraged social media to connect to her fan base, build a loyal following and even crowd sourced $11,000 via the Pozible platform to fund her first album.

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There was talk at the outset of how well ARIA did “engaging” fans this year on Twitter. So what? The ARIA awards are on television. It’s got a pretty good head start because its being broadcast.

Somehow it just seemed that the panel, with exception of aforementioned indie songstress, was hanging on to the old way of doing business. They reinforced the status quo again and again – acts still need the music business, there’s no such thing really as independent artists. Um, yes there is and the hecklers* in the crowd started listing acts: The Jezebels, John Butler Trio, amongst others.

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The topic of discovery and curated listening was raised by the moderator. The consensus was that serendipitous discover wasn’t all that it is cracked up to be and listeners need those cool music types to tell what they need to hear. OK so Genius, and other recommendation engines don’t work and won’t improve? So tag classification systems on Soundcloud or Hypemachine are useless? I know I’m a relatively savvy user but I also have faith that users, given a good service and a good UI, will explore features made available to them if they find them useful.

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The panel, I think it was Ben Shepherd from Sound Alliance segmented the music audience into two types: loyalists and casual listeners. It was implied that casual listeners will never pay and will be satisfied with free streaming music services and illegal downloads. I think these guys just hang out with the cool kids. There is a whole mainstream audience out there – sure they might listen to Susan Boyle sometimes – but they are happy to pay for music. Case in point, the entire Apple iTunes platform proves that if you create an ecosystem that makes purchasing seamless for the user they will indeed pay. What royalties artists derive from this is another matter entirely and nothing to do with social media and the music industry.

Repeatedly the panel kept talking about the web as a channel but not about social media as a platform. But it was worse than that. The web channel they spoke of looked entirely like a broadcast option only delivered via their specific platforms or partnerships. Convenient.

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An audience member pointed out that the three revenue streams of artists (synchronisation as in licensing from film and advertising, touring and merchandising sales) have changed only marginally and that the album, except for the top 10% of artists, has always been a loss leader. He asked Dan Rosen of ARIA where they fit in the new model of rental versus ownership (audio below). The response was that ARIA will support any legal way of purchasing music where rights/money flow back to the artist.

This led to the question of whether ARIA are exploring a streaming music chart? Sweden has one and apparently artists generate more revenue from streaming music services than they do from iTunes. OK this is interesting stuff but its platform, not social media. I also was left with no impression that ARIA are actively lobbying and negotiating with the likes of Spotify, soon to enter the Australian market. They most probably are, it just sounded so reactive on the night.

Ironically it was Ben Shepherd from Sound Alliance who was skeptical of whether Spotify will provide artists with the royalty cheques they deserve. We had learnt earlier on the night that radio only pays 1% royalties for the music they pay. This is clearly a disgrace, particularly when you consider the size of businesses like Austereo. He projected the Spotify IPO could raise a billion dollars the  Australian advertising revenues of Spotify in the millions* but he lamented that they would likely pay only minimal royalties. Why did I preface this as ironic? Because Sound Alliance themselves don’t necessarily pay their music writers for their content.

Sam Buckingham finished the night with a point that was at least on topic. Social media is about making fans and keeping them. And of course so much more.

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Full disclaimer: Some of those said hecklers are my friends and are themselves either music fans or music industry boffins.

Thanks to Jo Sabin for subbing this post.

* Thanks to Ben Shepherd who clarified what he said in regards to the potential Spotify IPO, correcting me in his comment below.

Comments

Henry
Reply

Thanks Eri, nice post.

As the said music industry boffin I’ve a couple of things to add.

The interesting thing about the audio at the end when they are talking abt radio, is that most radio royalty payments outside of the top commercial networks are determined by polling smaller stations every quarter (I think it’s quarterly – not often either way). An avenue that is open to abuse, but also by definition, not accurate and results in royalties still not going to the relevant artists… Hence the majors still get the majority of revenue that usually goes towards recouping their top 50 artists expenditure… The whole process is f%*ked from your average artists perspective who is receiving average airplay.
There is song recognition software that is pretty damn accurate that could log 80+% of AirPlay in this country, along with whatever people are playing in their retail stores, clubs, bars etc… That would result in a far more equitable redistribution of revenue for artists and rights holders.
It’s the second decade of the 21st century and they still haven’t done anything publicly to make this sort of change.

One other interesting thing for me was that none of the digital citizen crowd asked a single question in the nights proceedings. It would have been great, as a music person, to have some social media citizens’ perspectives given on the music industry. I attended for just this reason and sadly the conversation wasn’t around social media at all really.

Finishing on a positive note – hats off to Sam Buckingham for crowdsourcing the funding for her album! No mean feat!

Eri
Reply

Thanks for your comment H. You should have been on the panel.

Ben Shepherd
Reply

Hi – I need to point out some comments attributed to me are incorrect or more to the point, not said by me.

I didn’t say there were two types of music listener.

I never said there was no such thing as independent artists – I said most large scale music successes have come through a label machine. Yes people mentioned the Jezebels and JBT – I don’t consider them to be massive intl bands. I was talking more about international acts.

No one said music discovery is not useful. Hype Machine and Last FM are Sound alliance partners here in Oz and we love these tools. Why else would we invest the time and money to assist them in Australia? The comment was things get interesting with TECHNOLOGY and HUMANS … not one or the other.

The comments re Spotify was not about AU ad revenue – it was about a company seeking a billion dollar plus IPO that is paying our royalties to artists of only a fraction of that – hence companies building value on underpaying acts. I do not understand how “Sound Alliance not paying its writers” (which is not true as we employ numerous editors and freelancers who are paid) has any connection.

Nice review but next time maybe take notes so you don’t make such wildly inaccurate statements.

Eri
Reply

Hi Ben, I did take notes throughout the night. Apologies if statements were attributed to you that were not yours. I agree, things do get interesting with humans and technology but the panel seemed to favour a human having a curatorial role – rather than a group of humans having a social, collaborative role.

Also, why the focus on large scale artists only? Is this the extent of the music industry? Large scale artists are not the only artists who make a living in the music industry.

Ben, I share your thoughts regarding the royalties paid to artists. This is concerning to artists and listeners whether these meager royalties are paid by radio or by tech companies. I’m sure everyone that was there on the night will be keen to hear the results of the High Court decision. In fact everyone was shocked at the figures – a ripe opportunity there for the music industry to engage its audience, embrace and use social media.

Henare Degan
Reply

Awesome post Eri and so on the money – no pun intended! :) I thought every point in your post was spot on.

I can also corroborate the fallacy of the “loyalists and casual listeners”. As you know I’m no music fanatic so that’d put me in the “casual listener” camp. To say that I only want “free streaming music services and illegal downloads” is just dumb. As you say, the massive success of iTunes is just “loyalists”? Bullshit.

I want to discover new music I like. I then want to buy that music too. That’s why I love services like Bandcamp because I can buy music from artists I like, on terms that reasonable to me and I can more directly support the artists. #Win.

Spotify is a worry though, have you seen this? http://www.informationisbeautiful.net/2010/how-much-do-music-artists-earn-online/

However your point about it being a bit rich for companies like ARIA or Sound Alliance to criticise the entry of a new player is spot on :)

Eri
Reply

Thanks Henare. Sound Alliance and ARIA were not necessarily criticising the new player – more the status quo of royalties that are paid. But I am glad you mentioned Bandcamp – it sure is a different proposition to MySpace.

Clark Nova
Reply

Good stuff. I find the constant mantra of nobody is buying music anymore absurd, as has already been mentioned, iTunes completely disproves this.

It’s frustrating the majority of conversation appeared to revolve around the “music industry” which appeared to mean major labels and distributors.

Apart from having any real vision for the future there also appears to be a heavy re-write of history going on, as though independent artists have never had mainstream success (the list is endless).

It’s not as though self-releasing is a new concept, if it was second hand record stores would be pretty empty.

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