Monday, September 17, 2007

The music industry pie to be divided differently

A discussion is raging in the Dutch amusement industry. Last week the news service of the ISP Planet Internet published an article on the amusement industry. It recognised that the music industry is in trouble while the games industry is flourishing.

For years the music industry has lived from selling vinyl records and audio CDs. But since internet this has changed dramatically. Live performances are seen as yielding the revenues. But this is not true, according to Wouter Rutten, spokes person for the NVPI, the Dutch recording association. “Yes live performance yield more revenues, but they do not compensate the loss of revenues from carriers like audio CDs”.

He continues saying that he disagrees with the position that the role of record companies and record shops is changing and even has finished. He offers the position that live music can not survive without record companies. They are the flying wheel. They put the artists in the market, make them known to an audience, offer their music to channels and accompany them with marketing actions. Without all these efforts, less people would come to their live performances.

He supports his position with figures of the Dutch music scene. The annual turn-over of live performances in The Netherlands yields 80 million euro. This is only a small part of the half billion euro spent on amusement products every year. The entire pie of the amusement industry is about 1 billion euro. And this is already so for some years with only light fluctuations due to the economy. There are changes within this pie, but they are diverse with changes from audio CD to DVD.

Mr Rutten notes that the amount of music record shops is diminishing in The Netherlands. However he also grants that many of these music record shops evolve to multimedia shops.
He also indicates that the NVPI is less strict about down- and uploading as the Dutch piracy watchdog Brein. He makes no bones about illegal down and uploading; the NVPI is against it. But the association likes to look at the whole picture, while Brein looks at piracy specifically. NVPI even looks at legal alternatives.

He cites examples in the UK, where Prince has bundled his latest audio CD in a Sunday paper; no less than half a million copies. This was done to promote the twenty concerts to be given later on. Rutten is not sure that this type of economic models will make it in the future. He is convinced that these models will also reach The Netherlands. But this will not be the only model or method of sharing revenues. Prince had first to get popular, a task for the record company.

Blog Posting Number 870

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