Google Needs To Decide Which Side Of The Music Industry Fence It's On

Yesterday saw an interesting coincidence of stories hit the wires: on the European side of the Atlantic, the BPI announced that it had sent a cease-and-desist notice to Google in regard to links to copyright-infringed music files. Meanwhile, Stateside, the Wall Street Journal reported on (further) rumours that Google was planning to launch a music download store and subscription service to initially run on Android handsets.

A cynic might argue that the music service "leak" was bad news management from Google, aiming to portray itself as a doer of music industry good, not bad. Whether that was intended or not, it raises an important point. Some time or another (and it looks like it’s going to have to be sooner rather than later) Google is going to need to decide whose side it is on. If it's serious about throwing its weight behind becoming a major digital music player, it's going to need to start making concessions to its label partners. And of course it will start seeing more of a business rationale for doing so: How long will it be before ad revenues from keywords alongside P2P links start to look smaller than potential lost Google music revenue? (Remember we’re not talking about cutting the keyword inventory, just ensuring that legitimate links appear in searches for keywords to appear against).

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What EMI's Repositioning Means

On Friday EMI announced some major reshuffling to its org structure and additionally a repositioning of the company as a “comprehensive rights management company serving artists and songwriters worldwide.” Underpinning this is a closer alignment of EMI Recorded Music and EMI Publishing (which may have possible implications on EMI Publishing being sold as a standalone business).

The repositioning is the result of an internal strategic review, so it pays not to pass it off as consultant-speak window dressing for the re-org. Indeed Terra Firma has something of a track record of repivoting the structural focus of EMI.

So what does being a “comprehensive rights management company” mean? In principle it shouldn’t be that much different from what EMI and other labels and publishers already do (i.e., they create revenue for artists and songwriters by exploiting their works across multiple products and formats). Of course this core task is a much more complex one now than it was 10 years ago. As recorded music revenues continue to free fall, the importance of alternative revenue streams with brands, telcos, and device companies has risen exponentially. Add to that the numerous digital music formats, and you’ve got a complex mesh of revenue streams. And that’s without even considering other key revenue streams such as traditional synch and of 360 deals. The days of record labels just being record labels are long gone. 

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Forrester Consumer Product Strategy Podcast Episode 3

Click on the video below to view the latest episode in our podcast series "Find Your Popcorn." In this episode, CPS analyst James McQuivey answers the question "Will consumers ever pay for content again?"

Let us know your thoughts. Do you agree? Do you think consumers will ever pay for content again? Is charging for access to content the answer? Or is the fight against free unwinnable? (The registration process for commenting is now quick and easy.)

How To Get People To Pay For Content

It's the most common question I get in my travels: Will people ever pay for content again? See what I had to say about that in a recent interview below (as posted on Paidcontent.org)

Implied in the question is a belief in some yesteryear in which people did pay for content. But the good news is, they never have and never will. That's the good news? Yes, because once we stop imagining that people will someday pay for content again, we can focus on giving them what they will pay for -- access to content.

It's what people have always paid for and it's clearly what they pay for now. Look deeper into the past and you find that people did not underwrite all the pages of content in their daily newspapers. Yes, they paid for the newspaper, but that's just because the newspaper was the only way to get efficient access to that much news and information. Today, instead of paying for newspapers, they pay for high-speed data plans to their homes and on their mobile devices as well as subscriptions to content from Netflix and their cable companies, accounting for 77% of their monthly spend on content. And they will pay even more for that in the future as 4G becomes a reality. 

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