What The Tech Industry Needs To Learn About The Music Biz: Sympathy For The Devil (Part 3)

 This is the third part in a trilogy of articles exploring the misconceptions between the music and tech industries. It first appeared in Music Business Worldwide.

Part 1 questioned the manner in which rights owners contract with tech start-ups, Part 2 noted both YouTube and the music industry frequently appear to speak at crossed purposes. What about the tech industry? Should it not question its own misconceptions about the music business?


Challenging one another en famille is a good thing, but sometimes one also has to stand up for one’s own.

If the music industry is a family, to paraphrase author Chimamanda Ngozi Adichie, perhaps that makes the tech industry the “very rich uncle who doesn’t really know who (we) are”?

The tech industry is not some homogeneous mass of people: software engineers think differently to UX people, who in turn think differently to VCs who are not the same as corporate MBA-type people.

Yet there are some commonalities in how this broad constituency views the music industry – and not all of them are fair…


napster1) THE IDEA THAT THE MUSIC INDUSTRY DOESN’T “GET” TECHNOLOGY

This was true in the 90’s and early 2000s. One former colleague said to me “I don’t give a fuck about the Internet” six months after Napster launched.

There were plenty of executives who did not even know how to switch on their PC.

The next generation of music executives, however, comprises digital natives. On the label side, digital marketing and insight people play just as important a role as the traditional product manger. Aspiring managers are as likely to be working in social media or for a start-up as working for a label or promoter.

One of the most interesting facets to DJ Semtex’s 30 Under 30 list was the new school nature of people’s job roles, highlighting a significant shift away from the traditional music industry.


World Map - Spotify2) THE GLOBAL REPERTOIRE DATABASE 

The GRD did not happen, but not for want of trying. Having observed the GRD play out as a PRS major writer representative, I know how much effort went in to trying to make it work.

The PRS, however, should be applauded for bouncing back and striking a deal with STIM and GEMA to create ICE, a joint venture to streamline global digital licensing which is already making great progress.

Perhaps an even greater achievement is the joint venture between PRS and PPL. Not only does this demonstrate a more consumer friendly approach to public performance licensing, it potentially paves the way for a much closer working relationship on a data level. This is also a huge step forward.

There has also been plenty of focus from industry insiders about the potential for Blockchain and almost all the key players are engaging on some level.

There is still a long way to go and all sides need to come together, but the dialogue right now seems more productive than it has ever been.


Kobalt3) THE INDEPENDENTS INNOVATE… AND IT IS NOT JUST ABOUT KOBALT 

Kobalt, rightly, receives many plaudits for being a forward thinking and groundbreaking company. They have raised the game for everyone through applying technology solutions to traditional music industry functions.

Indie labels have always innovated, not just creatively, but also on a business level. Moreover, they have been doing so far longer than many of those in the Silicon Valley start-up ecosystem. Before there were “label services” deals, many indie labels paid artists a 50:50 percentage of net receipts and still do.

The tech sector has often been slow to recognize the importance of the indie sector, very often preferring to strike deals with the majors first. This is a mistake as more often than not independents have proven themselves to be more agile at adapting to new business models, which is reflected by the fact indies significantly over index on digital income streams.

Through the formation of Merlin, it has never been easier for the tech sector to engage with independent labels. Yet even Merlin has to fight continually for fair value on behalf of its independent label constituency.


universal_music4) THE MAJORS … IT’S A PEOPLE BUSINESS

It is easy to knock major labels, yet the commonly held reasons for disliking the majors could be applied to any corporation in any industry sector.

There are far worse examples found elsewhere. Remember United States v. Mircosoft Corp. first prompted by the latter’s behaviour towards Netscape?

One tech executive I met with recently seemed bewildered that any artist would want to sign to a major label. He didn’t get it. The answer is quite simple: artists don’t sign to corporations they sign to people.

If Darcus Beese and his team at Island Records (UK) wants to sign you and their vision meets yours, then, as an artist, you would be crazy not to. Amazing people can do tremendous things to further your career.

That is what record labels do and they come in all shapes and sizes. The trick is to find the label that best fits what you want to achieve. There are more options – majors, indies, label services, DIY – and that is a great thing.


Troy Carter5) MANAGERS AND LAWYERS

Those who represent artists, be they managers or lawyers, increasingly have a foot in both the technology and music worlds.

This goes way beyond headline names such as Troy Carter, Scooter Braun and Guy Oseary or innovative lawyers such as Fred Davis (who is now fully focused on tech).

Pretty much every major music law firm in both Los Angeles and London has a presence in both music and tech, with partners specifically dedicated to serving tech clients. This means, from an artist perspective, your advisors understand the value chain from all sides of the table.

Similarly managers, entrepreneurial by nature, are increasingly as likely to be connected with tech investors and entrepreneurs as they are with label and publishing executives.

A good manager finds common ground, brings people together and makes things happen. That can mean coordinating a tour with an album release or, these days, aligning the differing parties where both the merch company and the record label want to bundle product with the ticket pre-sale that has been agreed by the manager with the promoter.

On a broader level, managers are increasingly influential in the various music/ tech debates. They speak to everyone, they do business with everyone and they don’t take sides with anyone other than with their artist clients.


Beyonce Tidal7) NEVER UNDERESTIMATE THE ARTIST

There are so many misconceptions about artists it is difficult to know where to begin. Life in the public eye is never easy let alone for someone who bares their soul through music.

Accordingly, the stereotype of a fragile soul disinterested in business affairs persists. Very often tech people go along with that and take a somewhat patronizing tone when addressing the artist community.

The reality is an artist in the music business has to master not only their own art, but also the art of asking questions of their own team so they can make informed decisions about their own career. Advisors are there to advise but it is the artist’s career and their final decision.

The other misconception tech people have is all artists write and produce all their own music and then go on tour and sell their own merchandise etc. Alternatively they ridicule Beyonce’s track Girls on social media owing to its multiple writers and producers … how dare she not do it all herself?!

The reality is that songwriters, producers, mixers and session performers all add value to the creative process and must be paid too.

And, no, a songwriter does not make money from merchandise or endorsements, just the song.

Some backroom creators have been amongst the most tech-savvy people in the music business. It is no surprise former producers Kevin Bacon, Jonathan Quarmby (both AWAL) and Benji Rogers (Pledge) have found success as tech entrepreneurs.

It is in everyone’s interests that the tech industry engages directly with artists.

Mark Williamson, who leads Global Artist Services at Spotify, will tell you his toughest audience isn’t label executives or mangers, it is artists.

For all the brickbats that have been thrown at Spotify they are by far the most proactive tech company to engage with the artist community. YouTube and Apple are catching up and that should be encouraged not feared.


SO WHERE DOES THAT LEAVE US?

There has been a meaningful market for digital market for roughly sixteen years, during which time – conveniently for the purposes of rounding off this series of articles – there have been two American presidents.

George W Bush saw the world in binary terms proclaiming, “You’re either with us or against us”. Barack Obama acknowledged the nuances of the modern world but concluded, “Yes We Can”.

Who was the more effective leader?

Searching for common ground is a smart thing to do. Understand the upside for both sides.

All of us in the value chain, irrespective of where we sit, need to ask ourselves a question: do we aspire to be a Bush or an Obama?

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