At the 10th anniversary Vienna Music Business Research Days music business researchers and music industry representatives from around the globe looked into the crystal ball to highlight and discuss the “Future of the Music Business”.
The Young Scholars Workshop traditionally opened the conference as a forum for master and PhD students to present and discuss their research results with renown international music business scientists. This year two papers were awarded by an international jury with the first prize: “THE NEW MAGIC PEOPLE: An Ethnographic Study of East London’s Cultural Workers at Shoreditch House” by Sam Edrisi of Westminster University and King’s College London and “Creativity, Constraints, and Copyright – Hired Music Guns and the Case of Soundalikes” by Konstantin Hondros of the University Duisburg-Essen. Both papers are considered tob e published in the International Journal of Music Business Research (IJMBR).
On the following Conference Track Day, music business researchers from Australia, Austria, Germany, Italy, the Netherlands, Norway, Romenia, Spain, South Africa, UK and the US presented their research results on a broad range of music business topics, such as gender aspects in the classical music sphere, the live music business in the Netherlands, self-management and entrepreneurship of musicians, the demand for music in the music streaming age, music branding, music labour markets and music education issues (see program).
The final Invited Conference Day on September 13th focused on the conference main topic the “Future of the Music Business”. The London-based entertainment lawyer Cliff Fluet held the introductory keynote “The Music Business & Technology – How Their Past and Present will Dictate Their Future” and joined the following panel discussion on “The Future of Music Copyright” with Ros Lynch (Intellectual Property Office, London) and the blockchain start-up founder Steve Stewart (vezt, Los Angeles), moderated by Sally Gross (University of Westminster, London). The panelists discussed the impact of new technologies such as the blockchain and artificial intellectual on copyright legislation.
Michael Smellie, the former COO of Sony/BMG and Australian start-up investor, closed the morning session by looking back into the music industry’s recent past with his keynote on the music industry’s “Seven Deadly Sins” to learn more about the industry’s future.
After the lunch break Paul O’Hagan of the University of Ulster had a conversation with music manager Peter Jenner on the concept of label service contracts, which Peter Jenner introduced by signing Billy Bragg to Cooking Vinyl. Label service contracts have become very popular among superstars such as Taylor Swift, since there is no need to contract away all rights to the labels. Peter Jenner was also a mastermind and initiator of the “Music 2025” project, which was introduced for the first to the public by him and Dennis Collopy (University of Hertfordshire, UK) in 2014 at the Vienna Music Business Research Days. This year Dennis Collopy presented the project’s results to an international audience.
In the following keynote “What Are the Key Drivers of Growth in Music Streaming?” music industry analyst Chris Carey outlined the past, present and future developments in the music streaming economy. This was a good starting point for the final panel discussion on “Future of the Music Business – What’s Next after Music Streaming?” with Rebecca Brook (music industry consultant, London), Chris Carey (Media Insight Consulting, London), Phil Graham (University of the Sunshine Coast, Australia) and Michael Smellie (start-up investor, Australia), moderated by Dennis Collopy (University of Hertfordshire).
The 10th Vienna Music Business Research Days were supplemented by a book presentation event in the evening of September 11th. Daniel Nordgård of the University of Agder in Kristiansand/Norway presented the first volume of the Springer book series “Music Business Research” entitled “The Music Business and Digital Impacts. Innovations and Disruptions in the Music Industries“. Phil Graham of the University of the Sunshine Coast/Australia followed with the presentation of the book series’ second volume “Music, Management, Marketing, and Law. Interviews Across the Music Business Value Chain“. Subsequently both authors joined a panel discussion on “Big Data in the Music Business” with the Vienna-based start-up entrepreneur Nermina Mumic and music manager Peter Jenner.
10th Vienna Music Business Research Days 2019
“Future of the Music Business”
YOUNG SCHOLARS’ WORKSHOP ON September 11th (pdf-program)
BOOK PRESENTATIONS AND PANEL DISCUSSION
„BIG DATA AND THE DIGITAL MUSIC BUSINESS“ ON September 11th
Daniel Nordgård of the University of Agder in Kristiansand/Norway presented his book “The Music Business and Digital Impacts. Innovations and Disruptions in the Music Industries“. The book provides rare insights into the difficult and complex dialogues between stakeholders within and outside the music industries in a time of transition. It builds on a series of recorded meetings in which key stakeholders discuss and assess options and considerations for the music industries’ transition to a digital era. These talks were closed to the public and operated under the Chatham House Rule, which means that they involved a very different type of discussion from those held in public settings, panels or conferences. As such, the book offers a much more nuanced understanding of the industries’ difficulties in adjusting to changing conditions, demonstrating the internal power-struggles and differences that make digital change so difficult.
Phil Graham of the University of the Sunshine Coast/Australia introduced his volume on “Music, Management, Marketing, and Law. Interviews Across the Music Business Value Chain“. This collection of interviews captures a period of historic change for the global music business along with a wealth of professional knowledge that extends from the late 1960s through to late 2012 when the interviews were conducted. They record the experiences and insights of people who helped to shape a global business that is quickly passing into history and transforming into something entirely new, often because of decisions the interviewees have been directly involved in making. The material includes the aesthetic, artistic, technical, commercial, legal, and strategic aspects of the music industry. What is said is timeless in its historical significance for the music business and in its relevance for researchers engaged in studies on the dynamics of change in the global commercial music landscape.
After the two book presentations the authors discussed with the music manager Peter Jenner (Sincere Music, London) and the founder and CEO of the Vienna-based data analytics company Legitary, Nermina Mumic on “Big Data in the Digital Music Business”. (photo: Magdaléna Tschmuck)
CONFERENCE TRACK DAY ON SEPTEMBER 12th (pdf-program)
Bender, Matthias & Jutta Emes, Bauhaus University Weimar, Germany: “Customer-based artist brand equity. How streaming leads to new forms of marketing that drive brand equity for artists”
Cobeanu, Silviu, University of Leeds, UK: “Challenges in music business education: The role of problem-based learning (PBL)”
de Rooij, Pieter & Lynette Verduijn Lunel, Breda University of Applied Sciences, the Netherlands: “Adoption of CRM in a nonprofit industry: The case of Dutch pop music venues”, presentation
Desai, Bhavini & Eleonora Cattaneo, Regent’s University London, UK: “The impact of technology and social media marketing on the changes in relationship between labels and artists within the music industry”
Duffner, L. Roman & Benjamin Schiemer, Johannes Kepler University Linz, Austria: “Becoming and ageing as a band: An organizational form between family, project and firm”
Graham, Phil, University of the Sunshine Coast, Australia: “Implications of the digital economy for independent musical labour or: global “craft” economies”
McKenzie, Jordi, Paul Crosby & Liam Lenten, Macquarie University Sydney, Australia: “It takes two, baby! Does collaboration between artists increase the demand for music?”
Montoro-Pons, Juan D. & Manuel Cuadrado-García, University of València, Spain: “Live music consumption, information search and the local impact of music festivals”
Morrow, Guy & Jennifer Beckett, Melbourne University, Australia: “The impact of ARIA charts, New Zealand charts and regional Spotify charts on consumer purchasing behaviour in the Australian live music industry”
Mulder, Martijn & Erik Hitters, Erasmus University Rotterdam, the Netherlands: “Risk and trust in the live music industry”
Murphy, Shane Terry, Torrens University, Brisbane, Australia: “Music marketing in the digital age – An autoethnographic examination of key opportunities and challenges facing independent artists releasing music in the digital age”
Nordgård, Daniel & Roderick Udo, University of Agder, Norway & HU Business School Utrecht, the Netherlands: “Entrepreneurial decision making in the European music sector”
Toscher, Ben, Norwegian University of Science and Technology Trondheim, Norway: “The skills gap in higher music education”
Weary, Hal & Jennifer Brodmann, California State University Dominguez Hills, USA: “Music entrepreneurship and access to capital: An exploratory study”
Wesley-Smith, Bianca, Clorinda Panebianco & Sonali Das, University of Pretoria, South Africa: “Can we hear gender? Exploring the auditory identification of gender in violin performance”
Winter, Carsten, Hanover University of Music, Drama and Media, Germany: “Surveillance and/or participation in the future of music business? The future of music of ordinary people between commercial digital music platforms and digitally open-networked music-culture-ecologies”
INVITED CONFERENCE DAY
„FUTURE OF THE MUSIC BUSINESS?“ ON SEPTEMBER 13th
On the Invited Conference Day the Vice President for Internationalization and the Arts of mdw – University of Music and Performing Arts Vienna, professor Johannes Meissl, welcomed the international conference participants and stressed that the conference’s topic is highly relevant for the students of mdw. (photo: Stephan Polzer)
The London-based entertainment lawyer Cliff Fluet held the introductory keynote “The Music Business & Technology – How Their Past and Present will Dictate Their Future”. In the first part of his talk, Fluet highlighted the strong historical link between music and technology, which always was shaped by copyright legislation. The invention of the printing press, the market introduction of phonographs and records, the launch of commercial radio and the MP3 format enabled innovative forms of music production, distribution and consumption. The music industry weas always hesitant to adopt technological innovations and even tried to block them by legistic means, which often resulted in economic damages for the music industry. Fluet is convinced that innovations help to stimulate copyright rather than complicating it. Technology and music content are inseparably connected as Netflix proved with its subscription service for films and TV series. Tech companies such as Amazon, Apple, Google and Spotify transferred the Netflix model to the music industry by linking streaming technology with music content. To prove his concept, Fluet analysed in the last part of his talk case studies of tech companies that might shape the future of the music business such as social media video app Tik Tok, blockchain-based portal Bitfury, Chinese messenger service WeChat, music distributor AWAL and the music management and promotion service Fuga. Fluet concluded that dynamic forms of music distribution that are connected with social media applications are on the rise. Music content is much more contextualized with technology which opens the gate for new business models monetizing meta-data and music licenses. The music industry has to deal with innovations such as artificial intelligence, blockchain technology and 3D printing in order to survive in the digital age. He does not see a value gap between technology and music but a gap of understanding of tech companies and the music industry. (photo: Stephan Polzer)
In the following panel discussion on “The Future of Music Copyright”, moderated by Sally Gross (University of Westminster, London), Cliff Fluet talked with Ros Lynch (Intellectual Property Office, London) and Blockchain start-up entrepreneur Steve Stewart (vezt, Los Angeles). Ros Lynch of the UK Intellectual Property Rights Office (IPO) insisted that there is a value gap between music and technology, which is aimed to be fixed by article 17 (former article 13) of the new EU Copyright Directive. However, it would be naïve to think that copyright legislation could solve all problems of the music industry. Therefore, the decision makers of the tech and content industries have to gather at the negotiating table to overcome the problems. The main legistic challenge is not copyright, but the usage of the massive amount of digital data. Cliff Fluet agreed but also pointed at divergent interests of the industry players that has e.g. brought the project of the Global Repertoire Database to failure. The founder and CEO of Los Angeles-based blockchain start-up vezt, Steve Stewart added that bad and even missing meta-data create massive problems that also have to blamed on the collecting societies, which caused a controversy on the relevance of collective rights management. Steward insisted that the slow and bureaucratic payments by the collecting societies are a main problems for the artists, which could easily be solved by new technologies such as the blockchain. Moderator Sally Gross pointed out that technology cannot solve the problem of income distribution which disproportionately favours superstars. For Cliff Fluet the problem of unequal income distribution could also be solved by technology to increase the total amount of money by harvesting low hanging fruits. Sally Gross was not convinced and insisted that music is a public good. Therefore, not just companies should decide on the distribution of money but also the public. It is a question of market power how the industry deals with data and money. The future of music industry, therefore, will not only be shaped by technological innovations but also by social and cultural impact factors. (photo: Stephan Polzer)
Michael Smellie, the former COO of Sony/BMG and start-up investor looked once again back into the past of the music industry to identify “Seven Deadly Sins” it committed to learn more about how to avoid them in the future. Instead of the seven biblical deadly sins – Pride, Greed, Lust, Envy, Gluttony, Wrath and Sloth – the music industry committed different seven deadly sins: Technophilia, Intellectual Narcissism, Customer Nonchalance, Size Addiction, Global Fixation, Business Indifference and Impatience. (photo: Stephan Polzer)
Technophilia (or a love of technology): Unlike the widespread opinion that music industry representatives are technology averse, they have a deep love of technology. Michael Smellie remembered the times after Sony and Philips (then owning music major PolyGram) had launched the CD format. The economic success of the CD motivated the label to invest massively in innovative digital music formats such as DCC, DAT, Minidisc and SACD. However, no format could compete with the CD and the companies burnt a lot of money. In the early digital age the music labels wanted to compete with P2P file sharing network Napster by launching self-made online music services such as Pressplay and Get Music. However, the music companies failed to play in the technology field and missed the opportunity to license Napster to turn it into a legal business model, despite the acquisition of Napster by Bertelsmann AG. Again many investments had to be written off.
Intellectual Narcissism (or the desire to over complicate things): While the music industry had desperately tried to control the digital music distribution by digital rights management and complicated pricing schemes, Apple founder Steve Jobs offered a simple solution: Store your music MP3s on the iPod and buy single music tracks for US $0.99 and albums for US $9.99 in the iTunes shop. The result was Apple’s total control of the music download market.
Customer Nonchalance: In the analogue era the music labels had little knowledge about their customers. They shipped the records to the retailers who were in touch with the music fans. Therefore, massive advertising budgets were spent to promote records “with only a relatively superficial understanding of the audience” as Michael Smellie pointed out. With the launch of online music stores by Amazon, Apple and Google, the music labels gave little emphasise to customer data. Further the music industry players had no expertise to deal with the vast amount of data. They realized too late how important data is in the digital age. Later they had to invest a lot of money to retrieve the data and to establish a data analytics infrastructure.
Size Addiction: The music industry mantra is to achieve scale. Therefore, size matters to drive down average costs and to cope with music managers, music distributors and media companies. Thus, the music industry of the 1980s and 1990s was driven by mergers & acquisitions to gain market power by growing bigger and bigger. However, digitization eliminated the traditional market entry barriers and size has become a handicap. The majors had to downsize their business and had to learn how to cope with market niches.
Global Fixation: Hand in hand with size addiction goes the global fixation of the music industry. In the era of superstars, the majors’ main aim was to have a few smash hits to promote them globally. There was no reason to understand the specifics of different markets. In the digital era, local repertoire has become highly relevant as an income source for the labels. Nowadays, the labels have to take account of market peculiarities in order to provide different markets with customized products.
Business Indifference: History teaches us that the music industry representatives had little sensibility for the economic environment. They did not recognize crisis and speculative bubbles in time which led to wrong strategic decisions such as mergers and acquisitions at the wrong time. The labels’ focus on the creative content often obscures the view of the economic reality and leads to disregard of economic necessities.
Impatience (or show me the easy way): Michael Smellie was often confronted by the immense impatience of the artists and their managers, who believed that their breakthrough would be imminent. The fact is that success is the result of hard work for years and there is no guarantee to be one of the few lucky winners. There is no easy way to success and the labels should not suggest that to the artists they sign.
At the end of his talk Michael Smellie concluded with some tips from his many years of professional experience: (1) Focus on your core competence and avoid to become a tech company; (2) don’t develop complicated strategies, but keep it simple; (3) consider fans and customers as the most important asset of your business and learn as much as possible about them; (4) don’t believe that size only matters, but also identify market niches and most import (5) be patient!
After the lunch break Paul O’Hagan of the University of Ulster had a conversation with music manager Peter Jenner on the concept of label service contracts, which Peter Jenner introduced by signing Billy Bragg to Cooking Vinyl. Label service contracts have become very popular among superstars such as Taylor Swift, since there is no need to contract away all rights to the labels. (photo: Magdaléna Tschmuck)
In the following Dennis Collopy (University of Hertfordshire, UK) highlighted the results of the “Music 2025” project, he had introduced to the public with music manager Peter Jenner at the Vienna Music Business Research Days 2014. In his talk entitled “Is Music Data Fit for 21st Century?” Dennis Collopy summarized the project’s main findings of 50 semi-structured interviews with representatives of music companies and tech firms. The interviews made clear that respondents see the recorded music and music publishing as two completely separated spheres with a clear distinction between reproduction rights and performing rights. As a result there is little incentive to collaborate and therefore, the recorded music companies and music publishers operate in parallel universes. Still existing codifiers such as the International Standard Recording Code (ISRC) and the International Standard Writing Code (ISWR) are not connected and relicts of the analogue era. Therefore, Dennis Collopy suggested to support new initiatives such as the International Standard Name Identifier (ISNI) to integrate meta-data from the recorded as well as publishing business. There is an urgent need to establish an integrated new data infrastructure to connect the several still existing stand-alone data silos. Therefore, Dennis Collopy called for more cooperation between different industry players to find useful solutions. The current lack of cooperation further fosters data fragmentation and rises the costs of data processing and transfer. A first step in right direction is the DDEX initiative, but also an information campaign for artists is necessary to highlight the relevance of meta-data for their income generation. (photo: Stephan Polzer)
In the conference’s last keynote, data analyst, Chris Carey, tried to answer the question “What Are the Key Drivers of Growth in Music Streaming?” by highlighting the past, present and future of the music streaming economy. (photo: Stephan Polzer)
This was the basis for the following panel discussion on the “Future of the Music Business. What’s Next after Music Streaming?” moderated by Dennis Collopy. London-based music industry consultant Rebecca Brook, data analyst Chris Carey (Media Insight Consulting, London), Phil Graham (University of the Sunshine Coast, Australia) and Michael Smellie (start-up investor, Australia) discussed the conference’s main topic. Rebecca Brook identified the end of the era of music ownership with a current dominance of music access models such as music streaming. And despite the vinyl boom there will not be a comeback of the ownership model, the music technology expert is convinced. For Data analyst Chris Carey music ownership is not a dominant business model either, but might be part of a new music eco-system, which could connect owning and accessing music with the live music sector. Phil Graham stressed the relevance of live music business that has increased its revenue at the same amount the recorded music industry has lost revenue. He observed a redistribution of income for musicians, who, at the end, have to earn their livings. Income from music streaming, therefore, plays a minor role in the artists’ revenue mix. Phil Graham suspected that the direct transfer of money from fans to artists would be usual in a post-streaming world. Michael Smellie added that Apple started to dominate the digital music market by a new value proposition with its simple price model. Apple established a loss-leader strategy to drive out competitors from the market, which the company has also implemented for music streaming. The panel discussants agreed that the still strict separation of the recorded music industry, music publishing and live music business cannot be operated anymore in a post-streaming economy, in which new forms of contracts will regulate the relationships between artists and music industry intermediaries. (photo: Stephan Polzer)
This was the end of looking into the music business’ crystal ball. The 10th Vienna Music Business Research Days were closed by announcing the winners of the Young Scholars’ Workshop: Sam Edrisi (Westminster University and King’s College London) for his paper “THE NEW MAGIC PEOPLE: An Ethnographic Study of East London’s Cultural Workers at Shoreditch House” and Konstantin Hondros (University Duisburg-Essen, Germany) for “Creativity, Constraints, and Copyright – Hired Music Guns and the Case of Soundalikes”. Both papers will be published in the one the next issues of the International Journal of Music Business Research (IJMBR). (photos: Stephan Polzer)
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