Live@Musexpo: So, Are There Any Artists Really Making a Living Off the Internet?

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Live event coverage.

The Digital Summit: Connecting the Virtual and Reality Worlds

Moderated by:

Ted Cohen – Managing Partner, TAG



  • Grant
    – President/CEO, Maple Core (Canada)


  • Jay
    – Vice-Chair, Global Media & Entertainment Practice,
    Greenberg Traurig, LLP


  • Ralph Simon – CEO, The Mobilium
    International Advisory Group and Chairman Emeritus & Founder of the Mobile
    Ent’t Forum – Americas (UK)


  • Jonathan Sasse – Senior Vice
    President of Marketing, Slacker


  • Louis Castle – CEO


  • Vince Bannon – VP, Ent’t Partnerships &
    Development, Getty Images


Does the Getty model apply to the music industry?

Bannon: Runs through the Getty model, user-generated content, self-publishing success stories, etc.

Dexter: That model has not worked for music, band-loaded, democratic models, etc. (, artist upload, etc.)

Cooper: Talks of a ‘non-reactivity’ to Napster (Cohen
disagrees), but end result is music is free, “the public got used to
free”.  That also includes music, games, movies, etc., “how do we deal
with this?”

No one has used the internet to effectively generate a success story.  3 million bands on MySpace (number is actually much higher), etc.


But, so much content, everything is so wide. How to get critical mass?

Sasse: Discusses the Slacker model, which allows users to
listen to customized tailored stations.  “It can be a jump point for
them, it can be a portal to the next step” towards starting a fan


How to woo modern-day media consumers?

Castle: Premium argument, “there’s more for people to do than just consuming free content,”
adding aditorial, experience, the “second step is the deeper experience
that people will pay for, because people will pay for it.”

In the gaming world?  That means lots of digital, virtual goods.

Dexter: But, hard to upsell songs.


But what about the freemium fantasy?

Castle: Doesn’t work.

Cohen: Doesn’t work. “We have to figure out what the definition of a fan is.”

Dexter: “The pie is shrinking,” and again, “tough to upsell a song.”


And the app opportunities?

Simon: Discusses TuneWiki, which mixes social networking,
lyrics, music, and mobile formats. TuneWiki app encourages
interactivity, layers sales into the gaming experience.

Castle: Gaming-focused models that involve music offer more promise.


So where does it all go?

Cooper: Cable analogy.  One monthly fee, all of the content, then a distribution play.

Cohen: So how will that work? $5 for music – then $5 film, $5 books, people will push back.

Castle: People will always offer clever ways to offer things for free; “that’s always the problem with subscriptions,” “then, people are offended, to their core, that they have to pay subscription fees for something that is free.


Is advertising unworkable?

Sasse: There’s no margin for anyone to build a business there.
Then, “the $15 song was a great model,” pointing to the bundled CD.
But, “fans will spend money on the artists that they love, but we need
to connect them to those artists.”


So what does work?

Cohen: Relays story of an artist who is trying to get 1,000
‘true fans’ – of which, there are 100 so far – attempting the superfan

Bannon: Where is the greatest music website in the world – one
that offers total music discovery?  Like, “THE place to go to…
MySpace looks like crap, Facebook didn’t want to deal with music,” etc.,
then “the internet is good and there’s money to be made there, and
someone’s going to figure it out.”  Also, innovation will probably come from younger entrepreneurs outside the music business.


But, what artists are making a living on the internet, no day job?

Cohen: Show of hands? Lots of artists, almost none making a living off the internet.  One of the few was making royalties from a twenty-year old song (with the band Dramarama), almost suggesting the number was closer to zero.

Audience member: Back to artists supporting themselves –
anyone?  The numbers are zero, let’s hear some examples so that we can
learn as an industry.


And subscription?

Castle: “Subscription is a very tough sell, especially on the internet,” at least that was the learning in gaming.  “The trend is the opposite on the internet,”
instead it’s YouTube, Google, etc.  Not gated areas.  And, the reason
why a single, amazing site for music doesn’t exist is because it will
never exist – the net is too dispersed.

Cohen: New Cohen (TAG Strategic) client is Pirate Bay, a legal
version.  Relays a story about an NYU group of students – all of whom
said they use for free, none would pay. Then, they asked Cohen after the
panel how they could get a job in music.

Audience member: From Sweden, loves Spotify, told the audience that she upgraded to get rid of all the ads.


So where’s the disconnect?

Harvey Goldsmith: This is an attitude problem, “this is so
easy… it’s about education,” etc.  “When you provide good quality
product, and you educate, they will pay for it.”


Audience member: Who is responsible for teaching younger users
properly etiquette?  Not to steal, etc.?

Audience member: You can turn a casual listener into a fan.  Often, the song that is given away for free usually the one that sells the most.

Audience member: The problem is the music, “I’d pay $1,000 for the next Led Zeppelin album,” noting that the quality of music has declined.

Cohen: Disagrees, quality of music has actually improved, but “being good is not good enough.”