Music’s last stand

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Limerick Post spoke to Colin Rice of We7 as the company launches its music streaming service in Ireland

THE music business of the 21st century is in a turbulent and ever changing period. With the advent of peer to peer sharing services on the Internet it has become easier for fans to share their music collections and make them available to anybody for free. Since music-sharing service Napster was established in 1999, the music business has struggled to keep up and has all but lost control of its product with over 75 percent of digital music being downloaded illegally.

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With Internet Service Providers (ISPs) very reticent to take strong actions against their customer base to prevent online piracy it has become ever more difficult for the record industry to recoup its lost revenues.  So what, you may say, didn’t the same record companies overcharge for CDs for decades and make obscene profits on the back of music fans updating their old records and cassette tapes with the new format?. But while you are unlikely to shed a tear for big business, it is the artists themselves who are bearing the brunt of online piracy. Large scale acts such as U2, Kings of Lyon, Lady Ga Ga, or Beyoncé can tour, sell merchandise and rely on radio play to make back some of their earnings shortfall. It is the smaller acts and self-financed bands who pay for rehearsal space, pay for a recording studio, pay for a record producer/engineer, pay for mastering, pay to manufacture a CD, pay for sleeve design, pay for publicity, only to see months of work available online for free within hours of the record’s release.
The market for CDs is in serious decline, sales of new album releases are disappointing and the business of selling ring-tones is disappearing, according to Warner Group chairman, Edgar Bronfman. Legitimate digital music sellers such as iTunes or Amazon have seen their market mature and now reach a plateau where only very modest growth can be expected.
What the industry needs is a way of making music available to consumers that is free or inexpensive, that is easy to access over a variety of platforms and is monetized so that the creators will get paid for their work.
The buzz words on the industry’s lips these days is music streaming. Edgar Bronfman of Warners predicts that  licensing revenue from  streaming services will be “meaningful in 2011”,
Music streaming delivers to your PC a library of music which you listen to, live. The service is generally free to use and is supported by adverts playing regularly. For a monthly fee the premium service gets rid of the adverts and enables the streaming service to be accessed on a smart phone. On most streaming services you can build playlists of your favorite artists and also listen to a radio function which will play music similar to your chosen favorites.
It is possible to use social networks, Facebook / Twitter and so on to tell friends about music you are discovering and there is also an option to buy music which you download and keep.
Music streaming site We7 has just launched in Ireland. Colin Rice of We7 explains, “We are allowing music fans to sample music for free but in a legal environment. Unlike P2P (peer to peer), someone using We7 will be able to get music for free but the artist and the record label will still be compensated.”
For now most music is still downloaded illegally but Colin Rice says, “The trend is towards, how do you access music not actually how do you own the music. A service like We7 allows you to access six million songs anytime you want for free. You don’t actually own it but you always have access to it.” Which is good news for the industry and for music fans, why take the time to download and store music from P2P sites when you can access it anytime, anywhere with Internet for free. “We want to make using this service as simple and as easy as possible because that is how you defeat piracy”.
Interestingly, over 60 percent of the music streamed on We7 comes from its radio function which plays a constant selection of music based on your favorite artists. According to Colin Rice, many users have a “choice paralysis” when confronted with a library of 6 million songs and are happy to have music fed to them and in that way discover new music.
For new and upcoming bands, We7 has something called ‘We7 Presents’ where an artist can submit their music and We7 will promote it on the site. Unsigned acts can use Ditto, a UK music service. Ditto will promote and market unsigned artists and deliver their music to various different platforms. Ditto has had success getting unsigned artists into the UK Top 40 and all artists are compensated, whether they are signed or unsigned.
So what does the future hold for the CD or the local record shop, Colin Rice says, “There is still a market for those who want to buy a CD or a record, hold it in their hand and get the artwork. London’s Rough Trade record shop caters to that niche select market for people who actually care passionately about music. It just had a great year, profits are up, sales are up, in contrast to somewhere like HMV who is struggling a bit and having to close stores. But the mass market just want to consume music, people want to access it in a convenient way.”
While there is a lot of music streaming sites out there, they appear to struggle to get a profile with the mass market which they need if they are to survive into the future. Many of these streaming services, such as Spotify or Pandora, see Ireland as too small a market to even bother negotiating with local record companies. Now giant brands Google and Apple are to launch cloud computing streaming services of their own. Current streaming services such as We7 could have to pay a premium for access to Google/Apple smart phones. Colin Rice is confident for We7’s future: “It is interesting to see Apple and Google coming into this market. It just shows you that in such a short space of time that the idea of streaming music is really taken off. It is all about how we can differentiate ourselves from other services and offer something different form Apple or Google We are quiet lucky in that we have been around for 3 or 4 years now and are established in the market and have 3 million users a month in the UK. I think 2011 is going to be a very interesting year for digital music.”