The Music Network: Midem: 2011, the year of the digital ‘shakedown’

by Eamonn Ford

If one theme emerged from this year’s MidemNet conference, the starting pistol for the digital year, it was that there’s simply too much clutter in the digital space and not enough revenue opportunities.

The Palais de Festival in Cannes, France wasn’t as busy as previous yearssuggesting there might be too many services but not enough can afford the trip to France.

While Ted Cohen of TAG Strategic and legendary concert promoter Harvey Goldsmith used their keynotes to talk of the need to think of the long-term, the day’s subtext was that long-term will only be a reality for the few, not the many.

ReverbNation CEO Michael Doernberg said this year would be characterised by a “shakedown” in the digital sector as services either run out if VC money or get lost in the clutter.

Jeremy Welt, SVP of new media at Warner Bros Records, added, “There are too many tools and too much emphasis on tools.” Meanwhile Eric Garland of online monitoring company BigChampagne asked, “Why is there a glut of tools? Why is there such an emphasis on tools? It’s obviously about the money, right?”

Adrian Pope (director of digital & business development at [PIAS] Entertainment Group) countered, “We need to step back from that noise and clutter, set our objectives with the artist and pick the tools that best fit those principles […] The right tools for the right fit. Keep it simple.” He cited Arcade Fire as the shining example of the ‘less is more’ school of thinking where they just did a handful of things online but did them incredibly well and retained their credibility.

In the undoubted standout presentation of the day, Forrester Research analyst Mark Mulligan pulled no punches and forthrightly announced “digital music is just not working at the moment”.

He declared, “Digital music has failed in its three key strategic objectives – to offset the decline in CD sales, to generate a format replacement cycle and to compete effectively with piracy.”

The problem, as he saw it, was that the industry was focused too much on ownership (a hangover from the “analogue era”) and a new generation of ‘Digital Natives’ (those aged 12-15 who have grown up immersed in digital) prioritise access and experience over ownership. He said the ‘Transitional Generation’ (16-24-year-olds) were simply “recreating analogue behaviour in a digital context” by buying/acquiring “units” of music and ripping CDs.

He insisted the very future for the digital music industry lies in demolishing reductive thinking about ownership and moving to what he defined as the SPARC model (where services are Social, Participative, Accessible, Relevant and Connected) that appeal to the Digital Natives that offer the most hope here.

If it doesn’t, he warned, the industry simply has no future.

“Music’s first demographic time bomb is going off in our faces right now and the fuse has already been lit on another one,” he said. “Make no mistake – this is another ‘Napster moment’.”

Meanwhile in the bars, cafes and hotels, deals were still being done and services launching. The digital market is still buoyant with optimism but MidemNet 2012 could be the one that is less about firing rockets into the future and more about counting the casualties.

Posted by Ted • Friday, January 28, 2011 .