Judeumeh's Blog

Given the current woeful state of the record industry, this is a key question guaranteed to get some interest / reaction from the industry stakeholders, and other attendees, at the Music Ally event of the same name which was held on Monday in Central London. So read on for some startling revelations. No really, read on...

The event was organised by Music:)Ally, a digital music information and research outfit, and was sponsored / hosted by Deloitte. The speaker line up included representatives from HMV, Omnifone and consultants from Conchango and Deloitte, as well an independent music business consultant. This event was done in the usual format of the moderator’s questions to the speakers; an open floor Q&A session followed by a post event networking session. Key messages and observations from the event include the following:

• Music Ally Survey Findings – This survey of senior record industry people revealed, among other things, that: Album sales may well see a single digit percentage drop for next year, and that album prices could likely be down to £5 on average by 2012. Furthermore, the perception of the industry is that people will buy more music if it is easy to acquire (e.g. as soon as I hear what I like), and if it is cheaper in price and playable on multiple devices. Also that more “good” music would definitely be appreciated by the consumers
• Better packaging – A potential strategy for music retailers would be for them to find better ways to tap into the emotional connection people have with their music in general, and physical products in particular, perhaps by packaging up special editions and/or increasing the use of the USB album format to shift digital copies
• Adoption of ‘invisible’ models of music subscription – It was felt that digital music may not do so well if/when marketed as a commodity, and that there may be good opportunities to bundle it, so it appears to be free, as part of a subscription package (e.g. alongside TV, Telephony and Internet Access)
• Issues with bundling – The push back on the above ‘invisible’ subscription model, came from a major music label attendee who felt that ISPs already had enough on their plate dealing with cut throat competition on price, (and operating on very tight margins), and therefore are very much unlikely to want to do anything that might add to this pressure. Unfortunately this does not help the major music labels which are still left badly in need of intelligent propositions for new business models to sell their music (preferably in the album format)
• Dynamic pricing models – This touched on the potential for established digital music stores, such as iTunes, to exploit the long tail (i.e. old / niche music catalogues) with variable and cheaper pricing models to create a lucrative aftermarket. However, it was observed by a panellist that even this would also present its own challenges around what price to charge per song, track or album, and perhaps more importantly, how to value the old catalogues.

Overall these, and most other points on the night, simply served to emphasise the need for “something that works” for music retail, as soon as possible. Also it did not address a key question around what, if anything, can be done to evolve the current copyright / licensing regimes to better serve the needs of an emerging digital music business, or indeed the digital content industry as a whole. As ever, please feel free to add any thoughts / comments you may on this one too.