Foretelling the Future

James Sullivan
May 2, 2008
Assistant professor Allen Bargfrede moderated the discussion.
Eric Giler, CEO of Groove Mobile
Photo by Phil Farnsworth
Photo by Phil Farnsworth

When indoor plumbing first became widely available in the United States, homeowners must have been thrilled by the prospect of water—however much you needed—suddenly available at the twist of a faucet.

For music lovers, a similar abundance might soon be upon us: any song, any time, anywhere, for a nominal monthly subscription fee.

That's the forecast of a growing number of music industry analysts, who believe that the digital phenomenon has sparked a mass movement away from the concept of "owning" recordings of your favorite music, towards a new model of instant, all-encompassing access. At Envisioning 21st-Century Music Business Models, a lively panel discussion sponsored by Berklee's Music Business/Management Department and Professional Education Division, about a dozen industry experts convened to debate the pros and cons of music's rapidly changing delivery systems.

For musicians, the situation creates an unresolved dilemma. While many independents are finding new ways to reach an audience, it's not always clear how they will get paid.

After opening remarks by Marybeth Peters, the U.S. register of copyrights, on the changing nature of copyright law, the panel waded into the murky swamp of the issues at hand. Does a creative work have value if you can't put your finger on it? Do record companies have a future in a world in which physical product is no longer desired? And if every working artist is part of an enormous pool of contributors who draw from a collective income, who will administer those payments, and how?

Berklee's own Dave Kusek, vice president of Berklee Media and coauthor of The Future of Music, began by outlining the concept of music flowing like water. It is, he acknowledged, a "utopian" notion that still faces many obstacles before becoming reality. But just a few years ago he was getting thrown out of record company offices for raising the prospect; now, he noted, they're increasingly willing to listen.

Albhy Galuten, a longtime songwriter and producer (with 18 number one singles) who is now vice president of digital media strategy with Sony America, said that the biggest problem the industry faces is "sociological": When younger generations view music as "free" and don't feel guilty for taking it without paying, the culture needs to establish "some new mechanism where the creative arts are funded."

Several panelists described aspects of the business in which musicians have discovered new revenue streams. Jennifer Link, a Berklee grad who is now an executive with the ad-supported digital download service SpiralFrog, explained how downloads might work something like radio: seemingly free to the consumer, but supported by commercial advertising.

Eric Giler of Groove Mobile reported that his company has found that young people—the same people who believe music should be free—are perfectly willing to pay for ringtones and videos for their cell phones when convenience is a factor. And Gregg Latterman, founder of Aware, a grassroots scouting affiliate of Columbia Records that has discovered John Mayer and Guster, among others, discussed how film, television, and ad placements have superseded record sales as critical income for many of his artists.

Singer Brandi Carlile, Latterman said, has sold 250,000 records without realizing a dime in royalty money. But prominent exposure on Grey's Anatomy has earned her a steady stream of income in the form of sync licenses: "And that goes directly into her pocket," Latterman said. "It's cool to watch these checks come in."

With such a growing number of revenue options, artists are going to need some sort of universal licensing agreement to collect on their behalf, said Susan Butler, who covers legal issues for Billboardmagazine. It is, she stressed, a potential quagmire: the European Commission, which has been trying to discuss such a model, hasn't gotten past arguing about where to hold their meetings.

"These concepts," said Butler, "are not easy for anybody to understand."

That, the panelists agreed, is a major part of the problem. Galuten joked that he doesn't want to have to become a "network operator" in order to integrate all the various sources of music—on cell phones, portable players, and home entertainment systems—he has in his personal life.

Berklee trustee Steven Holtzman seconded the notion: "I don't care how my car works," he said. "I just want to put the key in and drive."

But while the brave new world can be overwhelming to contemplate, some old-schoolers continue to succeed. Newbury Comics cofounder Mike Dreese said that his company posted bigger sales last year than the year before, due in part to an increased focus on online sales of physical product. The Newburys of the world, he said, exist to offer an alternative to big-box behemoths such as Wal-Mart, which only stock titles that sell in quantity.

"Our culture is being compressed," said Dreese, and he wasn't just talking about digital files.

Leave it to a current Berklee student to look on the bright side. With artists finding new ways to make money, said Kenny Czadzeck, talent buyer for Cafe 939, "it's hard to say [music] is being devalued across the board."

Besides, he noted, sales of vinyl records are on the rise. Autograph seekers at gigs will still buy vinyl, he said, because "you can't sign a file."