Billboard Music – The New Music Industry Panel
October 5, 2010, Billboard Mobile Entertainment Live, Moscone West, San Francisco—in a morning panel, some executives from major labels, touring business, and management companies got together to talk about the new generation of the music business. Bill Werde, editorial director of Billboard moderated the panel. Speakers included Justin Little, day-to-day manager at Zeitgeist Artist Management, Matt Kozlov, vice president at Sony music, Rick Farmin cofounder of Superfly Presents, Kristin Hersh an artist in Throwing Muses and founding member of CASH Music, and Jack Isquith, senior vice president at Warner Bros. records.
The first question was are you developing partnerships with companies in the technology space? Kozlov responded to their only looking for partnerships and now they’re trying for more open relationships especially with game developers and artists. Looking for opportunities and interactivity which can create new revenue streams in unit sales of apps can replace the revenue for albums. In the future looking for apps that have new formats and provide new experiences for listeners.
Isquith tried to weigh dollars versus promotion. The dollar orientation can lead to promotion but they must always consider revenue opportunities and the effect they will have on other digital products. It is also consider the effects on the label and the content because promotion is not part of their core competency.
This brought on another question about selling products directly to consumers. Apple sells to consumers, Warner Bros. doesn’t. Hersh described CASH music as an organization of independent groups. As a group, they are trying to find consumers looking for new sounds. Some promotion is happening but mostly they work through word of mouth via Twitter and other social media. They’re continually looking for software to enable artists to generate new works, and are dealing with sustainability by having their listeners support the cost of production processes.
Apps are an extension of the Internet, which provides new channels, opportunities, and challenges for music distribution. Isquith noted that the music labels face is very different than the standard Internet. Apps increase interactions and are specific to the core group of super fans. For example, eight bit rebellion by Linkin Park is an artificial life creator and needed the involvement of the band. As a standalone product that exists in a complicated ecosystem. Apps are like Macy’s compared to the Apple store which is specific to music use. The artist must be involved more than a superficial level.
Kozlov added that they had to define what is a success. They cannot ignore the power of Apple for placement but also do direct marketing through the social media. These new resources can create opportunities. By focusing on specific parts of the market they change their data collection to get better demographics of the digital fan base.
This brought on the question what exactly is this new apps space. Farman suggested that events are inherently mobile and more fans are becoming super fans as behaviors change from discovery of a group to evaluation of the music. Apps are good vehicles to spread the word about a group or an event. For example, the mobile app connected to Banaroo concert helped concertgoers record the road trips to the event and created a community map to the event. They also tied in streaming music and other event specific functions to the apps. The IFAD is opening apps for other ways of viewing events.
Little described an app created for the band Death Cab for Cuties. This is a first generation information application and a new version is coming soon which will include RSS, tour dates, and other information about the band. It’s an active portal to fans as an extension of the band. Provide a different input method selects a change in from the PC. Apps are interactive and enable a social aspect to the experience. The social aspect changes word-of-mouth information gets out.
So what percentage of digital music is mobile and apps? Isquith noted that it’s hard to tell. For Linkin Park, the band has always been involved in digital from a business and fan perspective. They been working to expand their digital footprint. Hersh added that beyond licensing, apps are good for spreading the word. When a band can get 2 to 3 million downloads, this changes the existing digital space. This also creates a new definition of what is a band.
Farman observed the bands are brands that have not moved into aggressive advertising with the apps. So far the focus has been on developing the best mobile experience. And adjusting the unknown limits on the devices, context, and possible interactions. Apps can do special things from the artists, but also need line management to fully recognize possible revenues.
A detailed question on mobile commerce and changes anticipated in the future, the importance of this digital space to the industry, future business models, and whether the corporations know enough to proceed.
Kozlov responded that this is a new model for smart phones, which are increasing the use of apps. The new models call for three or four premium functions and some number of lower levels. This is an area of the emerging knowledge in the industry and is changing very rapidly. Apple is turning out to be a good partner. Isquith opined that music on mobile is crucial, but not all artists are going to be developing and using apps. After identifying that apps are a good idea, they are not just the migration of content from the web.
Little agreed that this changes the way people get information, so they have to be in this digital space. As an example, artist pages on Facebook didn’t take off because those pages were not where the people were. Isqith wanted all of his managers to be in the same space as the users. The artists need vision and comfort in this digital space. The labels are wrong if they think they can create a cookie-cutter approach and move web content into apps. Farman noted that the number of brands per band is increasing too much. In the music space, innovation is coming in new areas, but fans need better filters so they can find interesting new material. At the same time, fans need to establish their brand.
Finally, the question on developers and apps. Kozlov stated creative partners and good relationships lead to success. Little argue that relationships are important but are hard because groups traditionally go on tour, create albums, and have little to do with other media. If the artists, users, and developers have ideas, together they can make it work. Farman said it’s very important to understand the culture.
