#MIDEM: Terry McBride Warns of the ‘Dark Cloud’ Ahead

Cross-posted from MusicAlly, our Midem coverage partner.

“We’re on an edge of whether this business falls off the edge, or jumps to a new edge. And it’s all to do with control over the music.”

That’s how Nettwerk Music Group CEO Terry McBride opened his session at MidemNet today, talking about cloud music in particular, and the ‘black cloud’.

“A situation in which five years from now, downloads will be over, or at least generational… People will be pulling music from their smart devices, and they will consume the music that way. They won’t own it, they’ll just pull it.”

McBride talked about these apps as ‘valets’, where content doesn’t have any value, but context does have value. “That’s why this black cloud, I’m very concerned about,” he said.

“If the music business does not get moving and start to understand this shift in behaviour… some kid in Russia or India or somewhere is going to create an app that works with those cloud-based systems, where the artists don’t share in the revenue created by it.”

McBride said the music industry created this situation 15 years ago when it fought back against Napster. “We need to change how we look at this,” he said. “There’s an opportunity, but there’s also the opportunity of falling off the cliff.”

McBride thinks the music industry will actually grow in 2012, based on the shift in behaviour. “It’s no longer going to be about the sale of music, but the performance of music.” But he hopes that all the rightsholders understand that “this is going to happen whether they want it to or not”.

2 Responses

  1. Yurovski

    I already knew this, but happy at least one other Exec. is thinking the same thing.

  2. Brian Rice

    I think he’s right, but the ‘context’ I think needs to be the burden of service providers like BT, AOL, etc. They could set up ‘service packages’ that allow users to freely download/stream songs according to the package they’ve subscribed to. Each provider would need to create algorithms that allow users access to material such as music. Freedom of access would be dictated by the users ‘subscription profile’; ie. he/she would, on subscription, give an account of interests with regard to the type of content provided to them. Most internet, non-royalty-based content would be freely available under any provider package. But music and such would as limited in availability as the internet provider package subscribed to.