As the recorded music industry faces a difficult sales slide, bleak questions continue to surround the long-term fate of the sector.
Major labels, among others, are struggling against a continuing tide of free content, and an increasingly facile digital music consumer. During a Tuesday morning roundtable at Digital Hollywood in Santa Monica, a central theme was the saleability of recorded music over the next few years. Ken Hertz, an entertainment attorney and senior partner at Goldring, Hertz, & Lichtenstein, LLP, pointed to the “impossibility of the packaged product,” while others identified shifting budget priorities among the younger demographic. “They’re now saving their money to buy a Playstation,” remarked David Thompson, content acquisition manager for music and video at Sony Ericsson, referencing increased demand for big-ticket consumer electronics items.
The forecast is less-than-encouraging, though revenues outside of recorded music continue to grow, thanks to a voracious consumer appetite for music. That terrain suggests a diversification strategy, one that attempts to corral the varied revenue streams related to an artist. Earlier, EMI pushed the possibilities by signing a diversified mega-deal with Robbie Williams, though the verdict on that effort remains mixed. Moderator Ted Cohen, himself a former digital executive at EMI, defended the all-encompassing structure of the deal, though others heaped criticism upon the effort. “It was an unbelievable amount of money for a small amount of rights,” said Alby Galuten, vice president of Digital Media Technology Strategy at Sony Corporation of America. “They did it, it didn’t work,” quipped Hertz, though the attorney noted that diversified deals are already beginning to proliferate.
Coverage by editor Paul Resnikoff, on location in Los Angeles.