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Sony boss meets managers – can they be persuaded to back three-strikes?
By CMU Editorial | Published on Tuesday 15 September 2009
The boss of Sony Music UK last night held a meeting at the major’s London offices for the managers of artists signed to the label to discuss government relations, in particular on piracy issues. The manager gathering, which was seemingly orchestrated at pretty short notice, was motivated by the much previously reported change of heart in government circles in the last month. As previously reported, ministers who had shied away from forcing internet service providers to penalise persistent file-sharers in their big ‘Digital Britain’ report earlier this year are now seriously considering introducing such measures, seemingly at the instigation of that Peter Mandelson chap.
Confirming his big meeting with artist management, Ged Doherty told Music Week: “I had been thinking of holding a series of discussions about the future of our business with our artist managers in October. However, with the debate that’s raging in this week’s press and it being the first time any government has lifted a finger to indicate they want to help our industry, I feel we need an urgent meeting to bring forward the discussions. We have just a very short time left to convince the current government to support our industry and to show them that we are making good progress in terms of adapting our business models”.
Of course it may be that Doherty wanted to assess the opinions of the managers of artists on his labels’ rosters, or perhaps he was trying to lobby them for their support. Since the government announced it was rethinking its policy regarding file-sharing, and indicated it was considering some sort of three-strike system whereby persistent file-sharers might have their net connections suspended, there has been something of a split in the music industry, with half the business welcoming the government’s latest moves, the other half distancing themselves from any initiatives that might lead to music fans losing their internet connections.
The split is forming quite neatly between the corporates who invest in music rights (or who retail music rights-based products – ie CDs or downloads), and the creatives who create the content in which the rights exist.
This isn’t really hugely surprising. The latter group arguably have less to lose from piracy, because, given the nature of the music business until recently, many have given up the most valuable copyrights in their music to the aforementioned corporates anyway. Providing music fans who download music for free then spend money on other music-related products – eg gig tickets, t-shirts, the official book, whatever – then all is good. Because of course, the creatives, unlike the corporates whose primary business is still the acquisition of recording or publishing rights, get a cut when those other products are sold.
It has been the nature of the music industry for decades that, as far as many creatives are concerned, their recorded music (and certainly the recorded music from their early career) served two functions. Firstly it could be mortgaged to raise start-up money – ie you sell future rights for hard cash by signing a record deal. Secondly it provided a handy marketing tool to build your profile and boost your live, merchandising and, more so recently, brand partnership income. In both cases it doesn’t really matter if fans then buy your music – you’ve sold the rights anyway, and if people accessing your music for free means more people hear it, well it’s doing the marketing bit better then isn’t it?
Moreover, the more business savvy artists (or managers) realise that, having given up key music rights in order to raise start up capital, they, unlike the record companies, are not in the music rights business, but the artist/fan relationship business. There are numerous ways that relationship can be made profitable, more so than ever in the internet age, as the cleverer artist managers are now discovering. But there’s a strong argument that if you’re in the artist/fan relationship business, where the biggest potential for growth is through the internet, it’s probably best not to insist all your fans have their internet connections cut off.
All of which puts the music business in an interesting position just now. For the first time senior government players seem to be prepared to help the record industry try and tackle illegal file-sharing. For the majors record companies et al this is great news. Though now the threat doesn’t come from unconvinced politicians or, really, the ISP or consumer rights lobby. The threat comes from within the wider music business, from things like the artist management community, because you have two competing business models in the music sector, one of which benefits from a crack down on illegal file-sharing, the other the does not.
Which is possibly Doherty’s counterparts at the other majors could do a lot worse than having all the managers of all their artists over for tea. These are, indeed, interesting times.
