Issue #69

Last Update October 31, 2010

Technology  The State of the Digital Union by David Katz March 11, 2009   Three slogans characterized the Digital Music Forum East, held at the Jewish Heritage Museum in New York in February: "Monetization", "360" and "Discovery". The music industry is still reeling from the impact of technology on its way of doing business, still trying to figure out how to make a living in the new digital universe. These three slogans are the best answers they have found so far. 

Monetization refers to any method of making money from music that has broken free of the old model of record labels/record stores/album sales. After floundering for the better part of a decade, and trying everything from suing their customers to using digital rights management (DRM) technology to lock their music sale into a single gadget owned by a single person, the realization has finally set in that the issue is monetization (how to make money), not control or litigation. People are willing to pay for music, but on their own terms: the music must be easily accessible, it must be playable on anything the purchaser owns that will play music, it must be sharable, at least to a limited extent, and it must provide not just music, but a music experience. 

"360" is the technique of implementing monetization by providing the music creator (and listener) with a complete round of services related to the music. Companies with that philosophy attempt to put music sales, concert ticketing, merchandising (T-shirts, ring tones, album art, etc.), advertising sales, rights management, fan club management and PR all under one roof. This provides the artist, the record label and the artist management organization with multiple revenue streams, making "free music" less of a threat to over-all income and increasing the funds that flow to all concerned. 

Discovery is the key to maximizing revenue. No one buys music that no one has heard of. The name of the game is to make the music known. Blogging drives interest, but the major vehicle for exposure is still radio.  Broadcast radio, satellite radio and internet radio and podcasts all allow the music buyer to hear something new. Unlike mashups which a listener puts together himself, radio and podcasts do the selection independently of the listener, making it possible encounter a new song, a new album or a new band by accident, as it were. Any interest sparked in the listener by radio can then be fed by editorial or fan blogs, My Space and You Tube feeds, and other attention-getters. Once discovery has occurred, all else is possible. 

Experiments are now going on with providing artists with a menu of "360" services to choose from, allowing the artist to tailor his relationship with the label or artist rep firm and better control the revenues and expenditures deriving from his craft. In this time of technological empowerment of both the artist and the listener, the music industry finally seems to be adjusting to its new role.

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