ERA www.eraltd.org/news/redmond-blog.aspx Wed, 16 May 2012 15:08:00 Wed, 16 May 2012 15:08:00 /news/redmond-blog/blog/2012/may/should-there-be-age-ratings-on-books.aspx What is the relationship between art and real life: it sounds like a high falutin' question, but it has taken on a new relevance with recent controversies about the sexual content of music videos and Norwegian mass murderer Anders Breivik's revelation that he honed his shooting skills by playing Call of Duty. In both cases content industries feel unfairly blamed for societal problems, yet there seems little doubt that many parts of the entertainment industry are constantly pushing the boundaries of acceptability. Some music videos have been accused of co-opting the visual language of pornography into the mainstream in a way that would have been simply unacceptable not that long ago. One senior games industry commentator confided that even he, a committed gamer, can no longer stomach some of the more gratuitous outpourings of his sector. Films, which in the past would have received a 15 rating, have more recently been given a 12A rating, meaning that even under twelves are exposed to the same content. The extent to which popular culture reflects or leads cultural change - of course it does both - is an age-old discussion, but a study from the US last week suggests that this may not be a debate which should be restricted to electronic media. According to Science Daily , "Researchers at Ohio State University examined what happened to people who, while reading a fictional story, found themselves feeling the emotions, thoughts, beliefs and internal responses of one of the characters as if they were their own -- a phenomenon the researchers call "experience-taking". "They found that, in the right situations, experience-taking may lead to real changes, if only temporary, in the lives of readers. In one experiment, for example, the researchers found that people who strongly identified with a fictional character who overcame obstacles to vote were significantly more likely to vote in a real election several days later." The report goes on: "Experience-taking doesn't happen all the time. It only occurs when people are able, in a sense, to forget about themselves and their own self-concept and self-identity while reading…In one experiment, for example, the researchers found that most college students were unable to undergo experience-taking if they were reading in a cubicle with a mirror. "The more you're reminded of your own personal identity, the less likely you'll be able to take on a character's identity," (researcher Geoff) Kaufman said. "You have to be able to take yourself out of the picture, and really lose yourself in the book in order to have this authentic experience of taking on a character's identity." The Ohio study focused on the capacity for immersive fiction to generate positive social attitudes. It does not discuss whether books can have more negative effects. But it seems unlikely that you would have one without the other. And if it is the case that books can lead readers to adopt the attitudes of characters with whom they empathise, it seems unlikely that equally if not more immersive electronic media are immune from such effects. The film, tv, video games and music industries have long adopted age ratings and parental guidance regimes. The the book industry has not.   Watch this space: there may yet be calls for age ratings or at least guidance notices on books. With increasing public concern about the impact of the apparently relentless pushing of boundaries, the issue of the impact of art and entertainment on society is not going away. Ends /news/redmond-blog/blog/2012/may/should-there-be-age-ratings-on-books.aspx /news/redmond-blog/blog/2012/may/should-there-be-age-ratings-on-books.aspx Wed, 16 May 2012 15:08:00 /news/redmond-blog/blog/2012/march/what-music-looks-like-in-tesco-right-now.aspx What music looks like in Tesco right now Earlier this week Digital Music News posted a story This is what the music section now looks like at Walmart showing how in a Walmart outlet just outside Austin, Texas music had shrunk to one small island unit in a sea of LCD TVs. By coincidence I passed by Tesco in Hackney, east London that very day and decided to check how music is doing in there. And this is what entertainment looks like in Tesco right now, just one metre for games, video and music… And in case you missed it, the music "department" is just that bottom shelf… What it contained was one Emeli Sande CD, three Lana del Reys, one Essential Whitney, three Bruno Mars, five Now 80s and - hidden behind the Nows - two Rihannas, a grand total of 15 CDs. Now the Hackney store is by no means the biggest Tesco in the country and no doubt many Tesco outlets carry a much broader selection, but it should come as a chilling wake-up call to those who doubt how fragile music's position is right now in the nation's supermarkets. Last year CDs accounted for 80% of the albums market and supermarkets accounted for around a third of that - roughly 26% of the albums market overall. Tesco entertainment director Rob Salter has made it clear in recent years that music has been in the last chance saloon. It is labour intensive to stock, margins are low and and an anachronistic returns system means unsold product is expensively re-packed and returned to labels often just to be destroyed. Tesco's space allocation to music had already halved in three years. If the Hackney store is any indication, that process is continuing. Salter has urged labels to do more to make music a more attractive proposition both to consumers - and to retailers. The standard vanilla CD simply doesn't cut it any more, he says. He has suggested a number of options, most notably bundling some digital rights with the CD, allowing the disc to act as a bridge for currently physical-only music fans to move into the digital world. So far his words do not seem to have been heeded. It's not a problem for Tesco. There are many other things it can sell with far higher margins. It's not a problem for other retailers. Some of them may well benefit in the short-term. Those really set to suffer are the labels and artists. The fewer places there are to buy music, the less music will be sold. Salter believes the answer is in the labels's hands. But the message from Tesco Hackney seems to be that no one's really listening. /news/redmond-blog/blog/2012/march/what-music-looks-like-in-tesco-right-now.aspx /news/redmond-blog/blog/2012/march/what-music-looks-like-in-tesco-right-now.aspx Fri, 16 March 2012 09:15:00 /news/redmond-blog/blog/2012/february/are-downloads-the-“horseless-carriages”-of-digital.aspx Are downloads the "horseless carriages" of digital? Sixties media theorist Marshall McLuhan said one of the problems with media revolutions is that human beings insist on looking at the new world as though it was the same as the old.  "We look at the present through a rear-view mirror," he said.  "We march backwards into the future." It was rear view mirror thinking that led to the first cars being described as "horseless carriages". Marshall McLuhan - key insight: the medium is the message, ie new media are not just neutral carriers of a message. They change the nature of the message too - would feel right at home in the entertainment industry these days. A decade into the "digital music revolution" and we're still at the horseless carriage stage. Too many people still view the new world as though it were just a logical extension of the old. It's not. And the evidence is everywhere. It is arguably rear view mirror thinking which has seen the permanent download capture the imagination of consumers and technology companies and record companies alike. A digital download, a defined digital 'object' transferred from one party to another is in a sense no more than the digital equivalent of a plastic disc. Anative digital concept is far more likely to be a cloud service, a We7 or a Spotify. After all, a download gives none of the physical satisfaction of ownership of a disc. If you have constant access to what you want, why bother to 'own' it, especially when licence terms being what they are, you never really own it anyway? But while rear-view thinking characterises our approach to the kinds of product or service digital makes possible, it is also shaping our expectation of the way digital will develop. The history of the music business is the history of a linear progression from one format to another. CDs followed cassettes followed LPs followed 78s. There was always overlap, but it was like a relay race with one format handing the baton to another. We are comfortable with this concept and it colours most analyses of music's future. But what if it's not like that? What if a sizeable percentage of consumers have no intention of "transitioning" to downloads at all? When the BPI last year commissioned some research into consumer behaviour and their format preferences, the label it attributed to the most important segment, mass market CD buyers was "Going Digital". The assumption was that just as their forebears did, today's CD consumers will fall into line, accept the passing of the baton to a newer format and switch their buying behaviour online. But what if they don't? What if they're perfectly happy - if a little unexcited - by physical formats. The danger is that if they are no longer able to buy physical products, they may stop buying music entirely. There is a growing body of opinion that it is this which poses the biggest challenge to the music industry - and that there may yet be time for the video and games businesses to avoid the same mistake. Mark Mulligan, one of the most respected analysts of the future of the music business - and an unashamed standard bearer for digital music - is just the latest to identify it as a key issue in a recent blog post . Because he is a digital music enthusiast, Mark cannot help himself being dismissive of these "digital refuseniks", but he is forced to admit "with all of the focus on digital strategy it is sometimes easy to forget that the CD is still the beating heart of music revenues and the most widespread music purchasing behaviour, even in the US, that most digital of western music markets". The most recent figures from the BPI certainly bear this out with 80% of album sales in the UK still on CD in 2011. ERA's physical retail members - routinely dismissed as Luddites by some - have consistently argued that the record industry's pursuit of digital formats has lurched too rapidly from denial 10 years ago to wide-eyed enthusiasm for all things digital for the past five years. The physical music market is being allowed to wither on the vine due to lack of innovation, they say. What we need, they say, is something which bridges the gap between physical and digital - perhaps a cloud service allied to a physical product - which genuine helps people transition to the new world - and doesn't just leave them with a "horseless carriage". Could it be that the world is finally is finally coming round to their view?              STRATEGY | DEVELOPMENT | COMMUNICATIONS UK TELEPHONE: +44 7770 924720 | GERMANY TELEPHONE: 030 548 189 14 SKYPE:steve.redmond   /news/redmond-blog/blog/2012/february/are-downloads-the-“horseless-carriages”-of-digital.aspx /news/redmond-blog/blog/2012/february/are-downloads-the-“horseless-carriages”-of-digital.aspx Thu, 23 February 2012 16:26:00 /news/redmond-blog/blog/2012/february/an-inconvenient-truth-physical-formats-capture-80-of-the-album-market.aspx An inconvenient truth: Physical formats capture 80% of the album market The calls from aggrieved ERA members started within minutes of the BPI pre-BRITs sales announcement the other day. "Brainless" was one of the more heated comments. The cause of their ire was the relentlessly pro-digital tone of the BPI statement about annual record company revenues. It concentrated almost solely on the growth of digital revenues, though these remain less than half the value of revenues from physical product. It highlighted the growth of subscription services, now worth £24m, certainly creditable but, to put them in context, less than one twentieth of the value of the CD album market. Physical formats were referred to only in terms of their declines, but the statement managed to omit the fact that physical formats accounted for over 80% of albums revenue in 2011 - some 10 years after the beginning of the digital music revolution. ERA is a broad church and its membership includes many of the key innovators in the digital music market and so as an organisation it is certainly not anti-digital. It is pro-digital and pro-physical. It is probably fanciful to suggest, as some do, that the BPI is now actively discriminating against physical retailers and in favour of digital. It is more likely that the trade association simply wanted to promote a positive story ahead of Tuesday's BRIT Awards. But with growing concerns that the physical market is declining at least as much due to a lack of commitment by suppliers as to lack of enthusiasm from consumers, expect to hear more of this issue in coming weeks.   /news/redmond-blog/blog/2012/february/an-inconvenient-truth-physical-formats-capture-80-of-the-album-market.aspx /news/redmond-blog/blog/2012/february/an-inconvenient-truth-physical-formats-capture-80-of-the-album-market.aspx Mon, 20 February 2012 11:00:00 /news/redmond-blog/blog/2011/november/steve-redmond-on-how-to-turn-£3-worth-of-music-into-£20.aspx What price a punk classic? The journey of the Sex Pistols' Never Mind the Bollocks from threat-to-the-world-as-we-know-it tabloid horror in 1977 to a lifestyle accessory in the picture frame department of John Lewis department stores is probably not so surprising.   If Johnny Rotten can advertise butter and Iggy Pop can do the honours for insurance, we've long since ceased to be shocked by the ability of one-time revolutionaries to be absorbed into the mainstream. What is more striking is John Lewis's ability to command a price premium on this product. Never Mind the Bollocks and the 19 other titles John Lewis is stocking alongside Art Vinyl frames costs £20 for the vinyl LP plus CD in slip case combination. Contrast that with the current pricing of a Never Mind the Bollocks CD on roughtrade.com (£6.99), hmv.com (£3.99) and amazon.com (£3.89) or the price of the download on iTunes (£4.99) or amazon.com (£3.00) and the scale of disparity is clear: John Lewis is securing more than six times as much cash from the consumer for exactly the same music as the cheapest conventional music retailer. The cultural value of Never Mind The Bollocks is a question for another day, but in terms of market value, John Lewis is doing something quite magical - it's taking something other retailers believe only to be worth £3 and selling it for £20? How can they do this? And are there any lessons from it for the wider market? *** I have worked with Art Vinyl's creator Andrew Heeps on and off for the past four years. From the beginning I was intrigued by the way that putting a piece of music - or rather a 12" vinyl sleeve - in a new context, a frame, could transform its perceived value. Art Vinyl's Play & Display frames cost £39 direct from the AV website. A 'gift pack' which includes a vinyl album retails for £51. The consumer seems to have little problem with these prices - the company's most successful SKU is a three-pack of frames which retails for £99. Yet what has been consistent throughout this period has been the scepticism and sometimes downright hostility of many in the music industry towards Art Vinyl's pricing model. "It's too expensive," they say. "People will never pay that." But of course they do. And over the past four years the company has sold more than 100,000 of its frames. Art Vinyl's response has been to focus on other channels - particularly the design and interiors market. Art Vinyl frames have been stocked in Selfridges, they are in the Conran Shop, in the V&A shop and now, the biggest leap forward yet - in 24 John Lewis department stores. Sure enough, when Art Vinyl approached labels about securing supplies of vinyl albums for John Lewis the issue of price came up again. "Are you sure? £20 is just too much." Their scepticism is understandable. Music - like DVD - seems stuck in an endless downward spiral when it comes to price. At times it seems like the industry's only effective marketing tool is price-cutting. The John Lewis thought process is somewhat different. It didn't set out wanting to sell music. It wanted to sell frames, and compared with other picture frame products, Art Vinyl is not particularly expensive. But how to catch the eye of customers? You have to put something in the frame. Hence for John Lewis music is simply an accessory for the frames. But 12" vinyl records take up a lot of space and so need to be priced at a level comparable with other items in the store, hence the decision to create a unique SKU which combines CD and vinyl LP in order to justify the higher price. It's the exact opposite of what much of music retailing has become where the game seems often to be simply to buy and sell at the cheapest possible price. ***   There are three elements which allow John Lewis to achieve its £20 an album pricing. First, the retailer brand. Just as traditionally HMV and strong independents have been able to claim a price premium for their service and product range, so too can John Lewis. The department store may be famous for its 'Never Knowingly Undersold' price offer, but cannily it seeks to sell unique, value-added products like the vinyl-plus-CD combination which simply aren't available elsewhere. Second, context. Sell music in a music store and you cannot help being compared with other music stores. Sell it in a picture framing department and the context is far more favourable. Third, and most importantly, it's not selling music, it's selling something much valuable, it is selling an expression of people's identity. Much like the ringtone business at its height which paradoxically was able to sell a 30 second clip of a song for more than a full track, Art Vinyl's flip frames give consumers a way of expressing who they are through music. Stick the sleeve of Never Mind the Bollocks or Nevermind or Rio or the Velvet Underground & Nico on your living room wall and you're making a statement of who you are and how you want to be seen. *** So what's the relevance of this for everyone else in the music business? Clearly not every record shop can become a picture frame store. But it is a reminder that there is another way, and it's yet further evidence that the old music industry rallying call 'it's all about the music' is mistaken and quite possibly self-defeating. People do not just want the music - or if they do, it is not something they value particularly highly these days. It is context, packaging, merchandising and the ability music gives for consumers to express themselves which really generate value these days. And that's as true of Art Vinyl as it is of turntable.fm. What the entertainment retailing market really needs right now is a mass market product which can generate the same kind of engagement these more niche plays are clearly delivering. /news/redmond-blog/blog/2011/november/steve-redmond-on-how-to-turn-£3-worth-of-music-into-£20.aspx /news/redmond-blog/blog/2011/november/steve-redmond-on-how-to-turn-£3-worth-of-music-into-£20.aspx Mon, 07 November 2011 13:42:00 /news/redmond-blog/blog/2011/july/steve-redmond-on-lessons-from-the-plight-of-nokia.aspx Why Apple will fall Among the acres of newsprint about the woes of News International at the weekend,  there was one great piece it was easy to miss: the Mail on Sunday's account of the precipitous decline of Nokia, so dramatic it's almost a Murdoch. A few snippets: In 2000 the Nokia share price stood at €65. Now it's €4.30; In 2002 Nokia was named the UK's number two "superbrand". By 2010 it was 89 th ; Nokia's market share - once approaching 40% - is now below 30%, its lowest since 1999. In short, Nokia is on the ropes. And its relentless decline is of course the mirror image of the apparently ceaseless rise of Apple. Just as Nokia has faltered, so Apple, powered by the iPod, iTunes, the iPhone and now iPad has gone from strength to strength. In the FT Global 500 of the world's biggest companies by market capitalisation Apple appears at number three in this year's ranking, up from five last year. Nokia isn't even in the Top 100. Apple's market value at the end of March 2001 was $321bn. To put that in context, Warner Music which has a worldwide marketshare in recorded music of around 12% sold for $3.3bn, meaning the world's entire recorded music industry may be worth less than a tenth of Apple. Just as the value of record companies is at or near its historic low, so Apple's is puffed up to the max. Which is precisely why right now is a good time to consider what will happen when Apple suffers the same fate as Nokia and falls off its perch. For the one thing we know for sure is that market dominance of the kind Apple's iTunes currently enjoys never lasts forever. The fact is, the iTunes share of more than 80% of single track sales in the UK and perhaps two-thirds of the digital album market is not sustainable in the long term. History shows, if competitors don't get you then the regulators will. Remember when Microsoft was the biggest company in the world? It's now down to number 10. Google, the supposedly impregnable King of Search, now finds itself subject to anti-trust scrutiny. There seem no good grounds at this point for iTunes itself to be subject to its own anti-trust investigation. A dominant market share is not in itself justification for a competition enquiry. iTunes continues to deliver a superlative consumer experience. Setting aside the inevitable day-to-day niggles, most labels I speak to seem generally positive about iTunes as a trading partner.  As to where the likely competition to Apple - the inevitably iTunes-killer - will come from, that is no clearer either, although the rise of the internet-connected TV may be a good place to start. Whatever, the end of Apple's dominance will surely come. Which means for that small but dedicated band of visceral Apple-haters, your pain will come to an end. To those at Apple the only thing that can be said is, Enjoy it while you can. It will not last forever. Ask Nokia.   /news/redmond-blog/blog/2011/july/steve-redmond-on-lessons-from-the-plight-of-nokia.aspx /news/redmond-blog/blog/2011/july/steve-redmond-on-lessons-from-the-plight-of-nokia.aspx Thu, 01 September 2011 15:42:00 /news/redmond-blog/blog/2011/june/the-sale-of-music-week.aspx Mirror, Mirror on the wall… So it's 2001, CD sales are at their peak, the internet's certainly out there, but broadband's not even on the agenda for most people. Exclusive content commands a premium price. And because Twitter and Facebook and MP3 blogs haven't been invented yet, it's possible to be a business magazine publisher and a "gatekeeper" to content about the music industry. That was the Music Week I left 10 years ago. So I took a particular interest in the news yesterday, that the UK music industry's trade paper has been sold to independent publisher Intent Media, familiar to many ERA members through its ownership of games industry trade paper MCV. As is the nature of things, 10 years ago we never realised quite how good things really were. But the numbers tell their own story. It's less than five years since the magazine's owner reputedly turned down an offer of £10m for Music Week alone. Now the magazine has gone to a new owner with three other titles and their spin-offs for less than a quarter of that, just £2.4m. The declared turnover of the four titles sold yesterday is £5.4m. Ten years ago, the turnover of the Music Week Group alone - then comprising Music Week and the now-defunct MBI, fono anddotmusic.com - was £6.5m. Subscriber numbers to Music Week are now barely a third of what they were at the magazine's height. Which all means that over the past decade, Music Week's decline has not just mirrored that of the music business, it has exceeded it. *** Many will simply shrug their shoulders at these developments. It's inevitable isn't it? Everyone knows the music business has shrunk.  Many businesses have done far worse. Think of Musiczone, Woolworths, Zavvi and the hundreds of independent stores which have closed for good. Even those print publications not exposed to a declining market like music are shrinking in on themselves. On the same day the Music Weeksale was announced business publisher Centaur said it was closing the print editions of its business magazines New Media Age and Design Week. Only last week The Guardian announced it will be transitioning to a digital-first product. In magazine and newspaper publishing, just as in music, digital continues to drive out physical. The culture of free has slashed the price content can command. And because creating, shipping and selling physical product is inherently more expensive, it is bound to suffer.   Much is gained in the transition to digital - immediacy (the idea of sending print magazines via post these days just seems quaint), convenience, targeted content. But just as with music itself, we should not pretend that the erosion of the physical product does not also come with disadvantages, and those disadvantages are more subtle than you'd think. In the case of a trade paper, its most important function may be actually independent of the content, the news and data it contains. It is to hold up a mirror to the industry it represents. It's a magnifying mirror which makes that business look bigger. Take it away and the business is diminished. It's directly comparable to music itself retaining a store presence on the High Street. Take it away and music is diminished. The very existence of a thriving physical business is a tangible sign of status and vitality. Lose that function and something is lost. That's why we should wish the Music Week team and their new owners all the very best. In a very real sense we need them and the mirror they put up to our business. Because if you have no mirror, how do you know what you really look like?   /news/redmond-blog/blog/2011/june/the-sale-of-music-week.aspx /news/redmond-blog/blog/2011/june/the-sale-of-music-week.aspx Tue, 28 June 2011 15:40:00 /news/redmond-blog/blog/2011/june/air-on-sale.aspx Why artists need labels like Ministry of Sound 6Music have spotted it, Music Week stuck it on the front page and yesterday Popjustice waded in: pop's commentariat are going crazy about On Air On Sale and whether some labels are effectively cheating by breaking ranks. The immediate reason for this week's flurry of coverage is a singles chart in which four of the Top Five did not obey the new industry accord that singles should be made available to download as soon as they go to radio - in other words they were serviced to radio ahead of release in order to build demand. But should we really be berating labels for scoring Top Five hits? Should we really be beating up Ministry of Sound for propelling Example to Number One with sales of over 115k in a week? Sounds curious to me. *** The rationale for the On Air On Sale -expertly orchestrated for months by the MMF's Jon Webster and Joe Taylor - was essentially political. How can we lobby the Government for action against filesharing, went the argument, when for weeks at a time we don't give music fans a legal means to buy the music we're promoting? As a political point, it seems pretty compelling, and so it was no surprise that on February 1, smack-bang-in-the-middle of attempts to speed up the introduction of the Digital Economy Act and the lobbying around the Hargreaves Review that the new policy was formally adopted by at least two of the four major record companies. Despite the fact that by definition it seemed to concede the right to determine release dates to people who preferred to take music for free, it looked at the time like good pragmatic politicking. *** Fast forward four months, however, and going by some of the reaction this week to the inevitable cracks that have appeared in the new policy and you'd think On Air On Sale was a new religion rather than simple political nous. We are told of "disturbing wobbles" at the labels (sounds entertaining). There are demands that the OCC bans any singles which are serviced to radio ahead of release (the competition authorities would have fun with that one). And most over-the-top of all, the normally sensible Jon Webster demands that people "put the interests of the industry before the interests of an individual act". Let's be clear: any manager who allows a label to put the interests of the industry ahead of the interests of the act he or she manages probably has grounds for complaint. Funnily enough, in normal circumstances it's precisely the kind of complaint the MMF would take up. Surely if I'm an artist, I don't want a committee member, a consensus-builder, a smooth politician. I want someone who will go into the trenches for me. I want a label that will do whatever it takes to make me successful.  I want a label like Ministry of Sound that will help deliver me a Number One record. *** The point about On Air On Sale is that get it wrong and the people who pay the price are the decision makers themselves. Thus if I go to radio too early and lose a bunch of sales to illegal downloading that's my lookout. If on the other hand I go early when everyone else goes late and I steal a march on them, then I'm the smart one. It's no one else's business what I do. And you know why? Because it's my artist and it's my business. The On Air On Sale campaign has had a positive impact by questioning a default marketing approach based on interminable set-up campaigns which had long gone stale. But replacing one orthodoxy with another is not the answer. On Air On Sale may well suit huge international artists with an active fan base. It may well not suit a baby act who no-one's heard of. Ultimately the only people with the right to decide what is right are the artists investing their talent and the companies investing their cash. All the rest is noise. /news/redmond-blog/blog/2011/june/air-on-sale.aspx /news/redmond-blog/blog/2011/june/air-on-sale.aspx Wed, 22 June 2011 15:38:00 /news/redmond-blog/blog/2011/june/could-the-cd-could-be-the-future-of-the-download-market.aspx Could bundling downloads with CDs help maintain music sales on the High Street? We've heard lots about the impact of piracy on music sales the past few years. We've heard lots about the shift to digital. Less has been said about the shrinkage of retail space devoted to music. Yet it's no coincidence that the British buy more recorded music per head than music fans anywhere else when historically the UK has had the most diverse and numerous music retail market in the world. Give people more places to buy music and because music is so often an impulse buy, they tend to buy more. A lot more. That's why music sales fall when the retail space devoted to music shrinks. In other words the shrinkage of retail space devoted to music is not only an effect of falling music sales, it's also a cause of it. In the UK the rule of thumb is that when a store closes or pulls out of music half of the shop's sales shift to neighbouring stores. The other half simply disappears. As CD sales continue their gentle decline and prices are lower than ever - an average £7.86 per CD this year - retailers are running out of reasons to maintain their commitment to the five-inch silver disc. Space devoted to music is set to shrink further. If that happens, the still significant percentage of buyers who are only interested in physical product will simply stop buying  Suppliers may console themselves that some music fans will embrace digital, but the digital market has its own problems, not least the virtual monopoly of iTunes. At this point physical retailers have no realistic prospect of competing with the iTunes leviathan. Record labels find themselves increasingly exposed to a single customer now worth more than Microsoft and Intel combined. And those customers still wedded to physical product have no easy bridge to the convenience and accessibility of the MP3. No wonder there is increasing talk of creating a new hybrid format which combines the sound quality and physicality of the CD - and importantly can be racked on retail shelves - and the advantages of the download. There is already  a precedent for it: many vinyl albums come with download codes. Why not a CD with a download code? And maybe some additional content - lyrics for instance? The obvious counter to this is that CDs can already easily be ripped to a PC or Mac. But why not make the implicit benefit of being able to rip CD an explicit offer of a download. Instead of just accepting that fans will take a copy, why not give it to them? With the recent Hargreaves Review suggesting private copying be made legal, why not try and turn the inevitable into a positive? The compact disc is the best part of 30 years old. Since its launch in the early Eighties there has been no meaningful innovation. And yet year after year sales figures from across the entertainment sector show that innovation sells. Downloads grow faster than CD sales. Blu ray's growth outstrips DVD. Newer console platforms like Xbox 360 and PS3 do better than the established Wii. Could an innovative repackaging of the CD with download rights be the key to keeping physical music sales on the High Street, giving retailers the opportunity to compete with iTunes in the transition to digital and offering a convenient bridge for consumers to the benefits of the MP3 world? It would be ironic if the future of the music retail business had been sitting right underneath our noses these past 10 years - the compact disc. There will certainly be sceptics. Despite 10 years of decline, the temptation to do nothing seems remarkably strong. Yet do nothing and the status of music as a mass market retail product will continue to tail away. /news/redmond-blog/blog/2011/june/could-the-cd-could-be-the-future-of-the-download-market.aspx /news/redmond-blog/blog/2011/june/could-the-cd-could-be-the-future-of-the-download-market.aspx Thu, 09 June 2011 15:34:00 /news/redmond-blog/blog/2011/may/indie-label-market.aspx The Direct-Selling Challenge to Retailers Traditionally record label executives would run a mile rather than meet a real living, breathing member of the public, but this Saturday London's Berwick Street saw something really rather strange. Here were some of the most renowned and successful, even legendary, independent label owners in the UK - among them Rough Trade's Geoff Travis (The Smiths, The Strokes), Mute's Daniel Miller (Depeche Mode, Moby) Heavenly's Jeff Barrett (Manic St Preachers, Doves) and XLs Richard Russell (Prodigy, Dizzee Rascal and of course the biggest breaking artist worldwide this year, Adele) - manning market stalls, selling their product direct to music fans. They sold exclusive releases, merch (Mute offered a working synthesiser), even the worldwide rights to a new master recording (XL). They enjoyed it. And so did the customers.  The first Indie Label Market (ILM) - unashamedly inspired by Record Store Day - was a success. It will happen again.  ILM is the brainchild of Angular Records founder Joe Daniel. Originally he approached the organisers of Record Store Day with the idea of Indie Label Market being a part of the retailers' event. That didn't go down well. The word "hijacking" was bandied about - as was some riper language. Labels selling direct to consumers on a day all about labels coming to the aid of hard-pressed indie stores was never likely to win friends among retailers. Many indie record stores made it clear they would rather Indie Label Market didn't happen at all, but Joe was adamant, and after a lot of to-ing and fro-ing, Indie Label Market was postponed to May 21, the last possible weekend before the festival season begins in earnest. Walking down a sunny Berwick Street on Saturday morning at around 9.45am, the first thing to be seen is a queue outside renowned indie record store Sister Ray. One-nil to the traditional retailer. Further down the road, the market comes into view. A large banner declares 'Rough Trade' - but not of course the store, the label. One-all. The next stall sells fish. Clearly this retailing lark is posing some challenges for the assembled labels. Despite the planned 10am start, some stalls are still empty. On the Domino stall, the cash box - clearly bought specially for the occasion - is still in its wrapping. Joe Daniel struggles across the road dragging a large Calor Gas canister to heat the tea urn. It all looks a bit school fete. And there is virtually nobody here. But then something happens. People start turning up. In droves. The next minute Jarvis Cocker is DJing on the Rough Trade stall. Oh, look, there's Steve Lamacq. And Bernard Butler. And lots and lots of people. Mute have lifted Record Store Day's "indie cupcake" idea, but they've gone one better. Each cake has a little flag in it with a "QR" code. Just snap it with the camera and you get a free download. Being Mute, these are not just cupcakes, these are conceptual cupcakes, a statement on the value of music in the digital age: Cupcakes £1.50, Music free, reads the sign. There's a palpable enthusiasm in the air. The sun is shining. It is like a school fete. But the coolest one you've ever been to. * * * Indie Label Market was undoubtedly a success on its own terms, but whether the organizers like it or not, it finds itself slap, bang in the middle of the most controversial debate in entertainment retailing - the growing trend by content owners to sell direct-to-consumer, by-passing retailers. Since the dawn of the internet age, the threat of being "disintermediated", has hung like a sword over retailers' necks. If, mused the labels, the internet allows me to reach music fans directly, why do I need retailers at all? Of course the labels have faced a disintermediation threat of their own, as some managers have tried cutting record companies out of the loop and selling direct themselves. In a declining market it should be no surprise that everyone tries to eat everyone else's lunch. In truth direct-to-consumer has so far not come to much. The labels have had too many other battles to fight.  Some of the big plays to establish D2C service businesses, most notably Trinity Street, have ended in tears. But 2011 is shaping up to be the year when direct-to-consumer comes to the fore once again. And the threat to retailers is clear. The first to hit the fan was Now 78. The CD booklet for the compilation included six pages of promotion for the new  nowmusic.com  website which allows consumers to download Now compilations and buy physical Now CDs without ever troubling a retailer. Retailers did not take at all kindly to effectively distributing promotional material for a service which aims to take their customers off them. Strong words were exchanged. At the other end of the scale there's a constant background drip of exclusives, vinyl editions, box sets which are only available from the record company or - a common cover - from the artist's website. And then along comes Indie Label Market. In scale and intent, it is as far as it is possible to get from Now 78, but to many of those who have worked hard to nurture independent record stores with Record Store Day, Indie Label Market feels like the latest in a long line of kicks in the teeth. So where to draw the line with direct-to-consumer? Are we past the point when it is reasonable to try and draw lines in the sand? In a series of ERA meetings this week, retailers will grapple with just these problems. It could be quite a long drawn out discussion.   /news/redmond-blog/blog/2011/may/indie-label-market.aspx /news/redmond-blog/blog/2011/may/indie-label-market.aspx Wed, 25 May 2011 15:31:00 /news/redmond-blog/blog/2011/may/the-sting-in-the-tail-of-the-hargreaves-review.aspx Who rattled your cage, Professor Hargreaves?  For those of you who haven't waded through the 100-odd pages of the Hargreaves Review on Intellectual Property - and certainly by yesterday evening few had got beyond the executive summary (including it appears much of the media reporting on it) - it is actually rather good. The main propositions espoused by the film, music and games industries (and ERA) seem to have been understood. UK content is a great success story. While there are still issues to be tackled, the UK content industries are considerably more progressive than many of their counterparts in Europe. And rigging UK content laws to the benefit of US-based multinationals like Google really isn't a good idea. The Hargreaves proposals - once he discovered that the US concept of "Fair Use" is a non-starter under European law - are mostly sensible. All in all, content industry lobbyists could be forgiven for feeling rather pleased with themselves. The BBC's technology correspondent Rory Cellan-Jones  has shared his suspicion  that the content industries will be "c racking open a few bottles". But read it carefully and the Hargreaves Report contains one hell of a sting in the tail. Sprinkled liberally throughout the report are a whole series of snipes and jibes which ought to give cause for concern at the very highest levels of the content industry. The fact is Professor Ian Hargreaves has put on the Government record a withering critique of the tactics and arguments of the content industry. "Lobbying is a feature of all political systems and as a way of informing and organising debate, it brings many benefits," he says. "In the case of IP policy and specifically copyright policy, however, there is no doubt that the persuasive powers of celebrities and important UK creative companies have distorted policy outcomes." (page 93) Further distortion arises, he says, because "there is a striking asymmetry of interest between rights holders… and consumers" (p93). "There is no doubt," he says, "that the perspective of consumers has played too small a part in the work of the UK's IP policy makers." It sounds remarkably like the professor is suggesting that the content industry has manipulated the legislative process to the disadvantage of its customers. Despite the Government's insistence on evidence-based policy making, when evidence doesn't suit them content industry lobbyists simply ignore it. Hargreaves is particularly scathing of the continuing attempts of the recorded music industry to extend the term of copyright, a measure which - he says, quoting his predecessor Andrew Gowers - would benefit "a relatively small number of performers" at a cost of the economy of £100m. When evidence is produced, Hargreaves suggests, too often it is "lobbynomics" rather than economics (p18). He seems almost incredulous at the quality of research into piracy. "We have not found either a figure for the prevalence and impact of piracy worldwide or for the UK in which we can place our confidence…" (p73). "There is no shortage of claims about levels of infringement, but in the Review's four months of evidence gathering, we have failed to find a single UK survey that is demonstrably statistically robust." (p69) The track record of the content industries is not good, he says. "Copyright holders have a long history of resisting the emergence of technologies which threaten their interests, including audio tape recorders and VHS recorders. When the first sound recording technologies emerged, some music rights holders opposed the recording of music. At that time, it was the recorded music industry who were seen as dangerous innovators." (p46) The passions aroused by the "fair use" debate, he implies, are disingenuous or plain bogus. "It is… worth noting that the creative industries continue to flourish in the US in the context of copyright law which includes Fair Use… But that does not stop important American creative businesses, such as the film industry, arguing passionately that the UK and Europe should resist the adoption of the same US style Fair Use approach with which these firms coexist in their home market." (p45) So what should we make of this criticism? I suspect the pragmatic view of many industry organisations will be, "So what? Politics is a dirty business. The important thing is to win and we won." They might add - with some justification perhaps - that such comments are the embittered reactions of a man who had been sold a brief by David Cameron which was simply impractical and uninformed. Like it or not, however, Hargreaves has put down a series of markers. Future Government investigations into copyright - and they are bound to come - will inevitably take his work as a starting point. He has effectively raised a huge health warning over the content industry's lobbying. The legacy he has left for the industry is that the approach which served it so well on this occasion may not work again. Already it is said, perhaps emboldened by their victory over Hargreaves that some are spoiling for a fight over his proposal to legalise private copying. If it happens, they say, they want a levy on every MP3 player, USB stick and hard drive sold in the UK, as happens in some parts of Europe. If they don't get it, there is talk of judicial reviews and court action. It will strike some that - in the midst of a recession with everyone in the country tightening their belts - attempts to impose an "iPod tax" in order to legitimise something everyone does anyway might not go down well with the British public. If that happens, it may not only be Professor Ian Hargreaves who will be crying "Foul!" Sometimes it's better to quit when you're ahead.   /news/redmond-blog/blog/2011/may/the-sting-in-the-tail-of-the-hargreaves-review.aspx /news/redmond-blog/blog/2011/may/the-sting-in-the-tail-of-the-hargreaves-review.aspx Thu, 19 May 2011 15:29:00 /news/redmond-blog/blog/2011/february/the-simon-cowell-biography-tom-bower-should-write.aspx A number of people in the music industry will be fielding potentially uncomfortable phone calls over the coming weeks. Tom Bower - fiercesome biographer of Mohammed Al-Fayed, Richard Branson and, most recently, Bernie Ecclestone - has his sights on one of our own, Simon Cowell. He wants you to spill the beans. Having spent an hour talking to him, what struck me was still how under-served the music industry is in terms of serious analysis. When it comes to data - particularly chart data - we are superserved. When it comes to information - everything from Gaga's meat dress to Cheryl's battle with malaria - there's more than any sane person would want to read. But when it comes to analysis of the fundamentals - why some things work better than others, why some executives like Simon Cowell succeed and others do not - we're far less clear. Of course at a basic level, it's crystal clear: artists are successful because more people like them. Executives are successful because they somehow work out better than their competitors which formula will work best. But that's not hugely helpful: as to the whys and wherefores, there's still a huge gap in understanding - and one that's true of both film and games too. Popular culture is always a meeting place and conflict zone of art and commerce. Sometimes one is in the ascendant, sometimes the other. Pop music began as anexpression of singles-led commerce with Tin Pan Alley that was hijacked by the album-as-art brigade of the Sixties and continued so til the 90s. Simon Cowell is the ultimate expression of the revenge of commerce. The resentment towards him expressed by the proponents of pop music as art misses the point that after 10 years of falling album sales, if commerce wasn't to the forefront, pop music really would be stuffed. (He's the man of the hour in more ways than one. Terrestrial TV has been facing similar declines to music. His great success has been in throwing a lifeline to two declining businesses at once.) It's true that few Cowell productions will enter the canon of popular music - although Leona Lewis's Bleeding Love has a fair claim - but that misses the point: were it not for the 3m or so albums sold by X Factor and Britain's Got Talent contestants last year, the market would have been down yet another couple of per cent, and it's unlikely those sales would have been made up by Caribou or Foals or These New Puritans, or other critical favourites. Which brings us back to Tom Bower. You can't blame him for wanting details of conflicts, secrets, potential scandal. He is subject to the same commercial pressures as Simon Cowell. And it's those elements which sell. But wouldn't it be a more interesting book if he were able to isolate the X-Factor which has really made Simon Cowell so successful?   /news/redmond-blog/blog/2011/february/the-simon-cowell-biography-tom-bower-should-write.aspx /news/redmond-blog/blog/2011/february/the-simon-cowell-biography-tom-bower-should-write.aspx Wed, 23 February 2011 15:27:00 /news/redmond-blog/blog/2011/february/the-new-look-brit-awards.aspx The right move at the right time  For the past four years I've dined out on the story of the day when former BPI Chairman Peter Jamieson and I tried to persuade the BPI Council to move the BRIT Awards into the then yet-to-open O2 Arena. A ripple went around the room. "It'll never work," said one. "No one will ever travel that far east," said another. "We're not wrecking our show and putting it in there," said a third.  Even the very favourable deal AEG were then offering was not enough to persuade them. We were left in no doubt that we were idiots even to have suggested the idea.  Needless to say, within six months the O2 Arena was the most successful arena in the world, and we naturally felt somewhat vindicated. So it was with great anticipation that I arrived at North Greenwich tube station on Tuesday night for this year's BRIT Awards - at the O2 Arena. It wasn't only the venue that was changed for 2011. New BRITs Chairman David Joseph had rethought every aspect of the show from the TV production team to the PR company - even the BRITs trophy itself, newly redesigned by Vivien Westwood.  Within seconds of the huge show opener from Take That, it was clear that Joseph's changes were spot-on, a clever reinvention of the 30 year old BRITs franchise. It was an ûber BRITs. The BRITs on steroids. Each performance one-after-the-other giving a highly focused dose of contemporary pop. From Take That's opener to the intimate pure emotion of Adele, to the courtroom drama, riot scene and burning policeman of Plan B's outstanding performance it was state-of-the-art pop music at its best: sexy, smart, funny, heartfelt - and to the point.  Of course there were disappointments. No show is ever perfect. Instructed not to get in the way of the music, presenter James Corden barely made an impression at all. More serious was the show's disappointing ratings performance where it was beaten by Channel 4's Big Fat Gypsy Wedding. That specific ratings clash could not be avoided, but pre-promotion for this year's show felt lighter than in previous years.  Going forward, there are clearly areas for development: Build-up. It's worth asking whether in a faster moving media landscape the five week gap between the announcement of nominations and the show itself is too long; Sales. How can labels and retailers work better to maximise the commercial potential of the BRITs? The show itself benefited from a relentless focus on essentials. The commercial impact of the show deserves similar focus. Opportunities to view. MTV endlessly repeats its awards shows. If you miss the live broadcast of the BRITs, it is not easy to see it again. Online presence. The BRITs website is not good. Yet again, it's a focus issue. Download strategy. There may be practical reasons for selling BRITs downloads exclusively through iTunes. They are of course the biggest game in town. But that is no reason to exclude everyone else. International. There is clearly scope to rethink the BRITs international strategy, trading on the huge international goodwill towards British music and using it as a showcase for the best new UK music. However none of these issues matter at all unless the show itself is right. My guess is that Joseph decided to fix the fundamentals first and these other areas will follow soon.  And so what of the switch to the O2? It was clearly a good move. The nature of the arena means most people are closer to the action than at Earls Court. I suspect the senior record company executives and artists who dined on the floor of the arena rather enjoyed being secluded from the rest of the hoi-polloi. Those of us who dined in the adjoining marquee - and were treated to a performance by Jessie J - also had a great time. Those who experienced the show from the O2's suites tell me they felt a little cut off from the action.  The sheer scale of the BRITs operation clearly tested the O2's infrastructure and staff to the limit and led to long queues to enter the dining area. And that's more than three-and-a-half years after the venue opened. In retrospect the BPI Council may have decided against the O2 in 2006 for the wrong reasons, but it was probably the right decision at the time. One final thought. 2010 was not a great year for British music. UK artists were totally trounced in the charts by US talent. Few new artists emerged. Mainstream rock - the UK's historical strength - was a disaster area.  And yet this was a great BRITs Awards show. The best in years. If, as we all hope, a new wave of British talent emerges in 2011, just imagine what the new BRITs team will make of that. /news/redmond-blog/blog/2011/february/the-new-look-brit-awards.aspx /news/redmond-blog/blog/2011/february/the-new-look-brit-awards.aspx Thu, 17 February 2011 15:24:00 /news/redmond-blog/blog/2011/february/a-change-in-tack-in-government-relations-with-the-music-industry.aspx Fighting piracy is not a goal in itself This a personal view by Steve Redmond and does not necessarily represent the views of ERA Half the problem with lobbying politicians and government officials is you never quite know what they say when you're not in the room. For years it has been a ritual of music and creative industry lobbying to invite some political notable to your AGM/House of Commons reception/foreign trade mission and then listen while they recite back to you the pre-prepared brief. Over the years I've counted them out and then counted them back in again - Chris Smith, Estelle Morris, Kim Howells, Geoff Hoon, James Purnell, Sean Woodward, that slimy fellow from the BBC- and it's always the same routine: "our greatest cultural export/worth more than the coal mining industry (strange claim that one)/Beatles/Arctic Monkeys/creators deserve to be recompensed/piracy is rubbish blah blah.." Which is all well and good, except you never quite know what they say when you're no longer in the room. And which is why the music and creative industries should take heart from an event which took place yesterday at the BT Tower organised by lobbying group Business for New Europe, addressed by Culture Minister Ed Vaizey and EC Commissioner for the Digital Single Market Neelie Kroes, who is quickly shaping up to be one of the most important figures in determining the shape of creative industries in Europe. This wasn't the usual music or creative industries set-piece event. There appeared to be no one there from the music business apart from the two ERA members who were speaking, Amazon.co.uk MD Brian McBride and Rarewaves founder Brad Aspess. And yet both Vaizey and Kroes said much that could have come straight from the mouth of UK Music's Feargal Sharkey or the BPI's Geoff Taylor. Vaizey praised the measures to tackle piracy in the Digital Economy Act, measures he said - in a pop at some of the Act's critics - which are "not nearly as draconian as some people think". Kroes stressed the importance of artists being paid for their work. "We should educate young people that (otherwise)  there won't be new artists, there won't be new music," she said. And yet from both there was a strong subtext  that while the music industry may have won the argument on piracy, the argument has now moved on. "Fighting piracy is not a goal in itself," said Kroes as she laid into some of the real barriers to trade across Europe. The real goal is to open up the digital market in Europe. How can it be, she asked, that it is relatively easy to ship a CD from territory to territory within Europe, but virtually impossible to sell a download from one country to another? "Digitisation has fundamentally changed content industries," she said, "but licensing models simply have not kept up with this." Collection societies, she said, "are playing a really negative role". All this would be of purely academic interest were it not for other developments and various off-the-record hints and tips in recent months suggesting that the creative industries may be about to find that relations with government are about to enter a new and potentially more uncomfortable phase. The Hargreaves review of intellectual property law in the UK is currently looking at whether copyright law is hindering the development of new digital business models. In this light the established record industry demands to combat piracy and extend the term of copyright with nothing else on the table is beginning to look outdated. The message from Kroes is that in pursuit of a Digital Single Market, everything is on the table. For their part entertainment retailers are becoming increasingly frustrated at the slow pace of change on some of these issues. Increasingly people are questioning the wisdom of copyright laws which mean in the UK it is still technically a copyright infringement to rip CDs to your iPod. How can this be right in an age of cloud computing? And how can we expect consumers to respect copyright law when copyright law in these cases is clearly no longer fit for purpose? The lawyers and professional lobbyists who have managed the content industry's relationship with Government have undoubtedly done a good job in putting piracy on the agenda. That argument has now been won - whether we're in the room or not. The question for the coming months and years is whether that lobbying should now be informed by more pragmatic and more commercial voices. /news/redmond-blog/blog/2011/february/a-change-in-tack-in-government-relations-with-the-music-industry.aspx /news/redmond-blog/blog/2011/february/a-change-in-tack-in-government-relations-with-the-music-industry.aspx Tue, 08 February 2011 15:18:00