By Jacob Katel
By Laurie Charles
By Nate "Igor" Smith
By Abel Folgar
By Kat Bein
By Jacob Katel
Goodfellas gangster Paulie coined the phrase, but at the MIDEM-Cannes conference, which took place last month, Talal G. Shamoon, senior vice president of media for Intertrust USA, used the movie mobster's strong words to describe the current state of the music download biz. "2001 will really be the year where people will try to capitalize on the hot air of the past three or four years," Shamoon predicts. The VP described a desperate scene currently being played out in the Internet's corporate corridors. "There are people who are being dragged into their CEO's offices across the world saying, “I'm sorry. Napster came along. The downloads didn't go out,' and it's “Fuck you; pay me.'"
In the main auditorium of the Palais des Festivals, rows are laden with CEO upon CEO of record labels, distributing and publishing companies, and survival-of-the-fittest Internet companies with a dash of artists in the mix. The annual MIDEM conference draws some 11,000 participants from 96 countries, approximately 1000 of which are musicians. The mob gathers for five days to scope out the 7000 exhibiting companies. The massive scale makes attending the conference much like an archaeological dig. A new addition to the conference this year, MidemNet gave a forum to artists and labels scrambling to protect copyrights from Internet robbers.
Prosecutors recently put the heat on download powerhouses MP3.com, Napster, and Scour with a spate of copyright infringement lawsuits. Yet there are signs of life beneath the digital rubble. The judgment that forced MP3.com to cough up $53.4 million for Seagram's Universal Music Group also ensured the site would have access to Universal's catalogue. In a similar vein, while waiting to see how hard the courts will slap Napster's hand, the file-transfer network forged an accord with BMG that has attracted considerable international investment. The major record labels have inked agreements with sites including Music.com, Vitaminic, and Liquid Audio in the hope that the Internet partners will handle digital distribution, promotion, and marketing, while protecting copyrights through encryption methods and superdigital music available only for a limited time. If litigation has set major hurdles for music distribution Websites, the record labels seem willing to hold out their hands and help their former rivals climb over to mutual profitability.
Just what the artists get out of these agreements is not clear. When the question of whether the musicians have gained anything from the lawsuits came up at MidemNet, the topic was brushed aside as quickly as Peter Gabriel could shake his head "no." Rather than wait for the industry to cut him in on the spoils, however, Gabriel has launched his own distribution company with cofounder Charles Grimsdale, called On Demand Distribution. A subscription service through which artists distribute their music directly to consumers over the Internet, this model allows musicians to play an active role in the marketing and sales of their creations and ensures the flow of profits directly into the artists' pockets. "I can imagine having a little desktop factory, which would carve an image of Otis Redding in front of me, and I would stick it up on the shelf," Gabriel explained, "and when I want to hear his music, I would pull it down and stick it in my computer. I would have in time, access to his catalogue. Or maybe I would be subscribing to his site. That is a model that I see working."
Fellow featured speaker Herbie Hancock also favored an artist-centered model. "If you want to know my feeling about Napster," said Hancock, "my feeling is that I am pro-choice. What that means in this sense is that I don't mind someone downloading something of mine for free, if I want them to download it for free. I would like to make the choice." With his new record label, Transparent Music, Hancock purports to extend those "choices" to consumers. Eager fans will surf through the site, sample sounds, and provide feedback directly to the label. Hancock argues that open access and feedback will allow bands to develop a fan base organically.
The schedule of the MidemNet panels kept the profit hunger of the music industry from flowing into the free access ethos of the artists. Hancock and Gabriel outlined their artist subscription models without having to explain how artist control and consumer choice would coincide with the profit motive of the major labels. Although the majors are in active pursuit of downloading capacity, they did not express interest in supporting artist-centered models such as those described by Hancock and Gabriel at MidemNet. As Gabriel Levy, director of online marketing for BMG explained, the majors see digital downloading as an extension of their current methods of selling discs. "How quickly is [digital downloading] going to grow? I don't know," he said. "I can't target a percentage for you, but what I can tell you is that I don't think that the brick-and-mortar distribution is going away anytime soon." Conversely it is safe to assume that the majors will structure digital distribution to work very much the same way as traditional distribution: under the primary control of the labels.
The majors have learned from the threat posed by digital-distribution pioneers and are aggressively avoiding further corruption of their copyrights. Jay Samit, senior vice president of new media for EMI, pinpointed the most important question for his label as it took stakes in more than 40 dot-coms: "We as a music company have to stop and say, “For your two ears, how much did we make today?'" Oddly inspired by the pursuit of profit, Samit revealed the uncertainties in the digital-distribution future by reciting a poem. Regardless of who ultimately gains control of getting the music out, Samit's closing stanza suggests the stakes lie in the sounds themselves: "E-ticketing, e-magazine, Webcasting shows/Extra dots for serving radio and God only knows/I have no idea what the future may bring/But one thing's for sure, content is king."