Former Pink Floyd and T Rex manager Peter Jenner, now emeritus president of the International Music Managers' Forum, talks online music, copyright and the future of the music industry.
>Was the UK Digital Economy Act right to focus on copyright?
I can see what they were trying to do, but where they went wrong was in obsessing about piracy and P2P (peer-to-peer) filesharing. It became about how we stop P2P and in my book stopping P2P is like trying to stop it raining. The whole internet is built on copying.
The act focuses on a false problem. That is not to say that people not paying for music is not a problem. But P2P is just one of many ways in which you can access music for free. People have memory sticks, blank CDs, email, instant messaging, so I think it was a very facile look at the issue which was driven by the copyright industry.
>What angle should the government have taken when debating the act?
They should have looked at the question the other way round by taking into account how people access their music. If what we want is to make sure the creators are properly rewarded then we need to work out how we can find the systems which work and are consistent with the way the public uses digital material, technology and devices. My position, essentially, is that when you buy a broadband connection you are not using it to access your email, you are primarily using it to get content. What we should be doing is charging for use of music on the internet in an unobtrusive way.
We already do it on radio. People buy their BBC licence and one of the things it pays for is music, both in terms of employment of musicians and royalties. A lot of creative content is paid for by the BBC. We should be looking at a similar model for the internet.
>Will the act help stamp out piracy?
It might move P2P from unencrypted services to encrypted services and from major internet service providers (ISPs) to intranets. But if the major labels start suing people it will increase people's hostility towards them and towards the music industry and will decrease the likelihood of people paying for music. And it will destroy revenue. The costs of administering the act will be phenomenal and that cost will rightly be stuck at the door of the industries who wanted it. It's basically unenforceable.
>As physical sales decrease, how should the music industry be monetising its content?
Record companies believe that music is about selling bits of stuff to people in a retail environment. They always looked on the internet as a potentially huge retail environment and it's actually a service environment. The record companies should be working out what services they can provide.
They should also be talking to ISPs instead of fighting them. The key thing is people are going to want music as part of what they get on their digital connections. The ISPs are going to have to invest more and more to develop better services, and in that context they will have to start charging for content, whether they charge for content directly with a meter or whether they bundle it or use advertising or sponsorship.
Another way to go would be to look at statutory licensing for different types of usage. It would be incredibly bureaucratic but it would be one way. So let people access whatever music they like and pay a set rate. The same with commercial businesses.
>Do record labels still have a role to play in the music industry?
Yes absolutely, particularly for investment and promotion and marketing. And they could become very good at licensing, at helping artists to develop their website. But they have to get away from this idea of control and instead become partners of the artists. Many of the record and film companies are very enamoured with the idea of control because it’s how their model has always worked, with in-house lawyers and copyright advisors. There is huge inertia in the way the industry licenses and administers content. We have to fight this.
>How have the sources of revenue in the music industry changed?
Until the CD came along I think artists overall got a better deal and more control and a better bite of the money. After they invented the CD the record companies increasingly fought back, decreasing artists' revenue share and increasing their control. That's just got worse with the advent of the internet because there is less money available. You used to be able to sell 5,000 albums, now that is incredibly hard so the industry has to look at digital options, but a lot of web services don't pay properly. Google will pay you a share of the revenue you generate for them, but if you don't make them money you don't get money.
>Has social media changed the way bands are marketed and content is discovered?
Yes, but it has huge potential to do more. At the moment, because it isn't licensable, it isn't doing the job that it ought to be doing. But what it can do is alter the value chain. With less money available in the music business we have to instead look at what we do have. And what we have is lots of data on music fans. Marketing has always traditionally been more expensive than recording but we can cut these costs by using social sites and viral links. And maybe we can cut out advertising costs because acts can just directly email their fans.
>Can music-streaming services support the music industry?
They are good, but they don't have all the music. I manage Billy Bragg and there are a hundred versions of his tracks online. I can get a recorded version but a lot of the times on these services there are no live versions. And globally there are billions of tracks so the problem remains of how people find a particular piece of music or if they like something how they find similar bands. People aren't just looking to buy the music, they are looking to buy a service which is personal and recommends music and enables discovery and which saves them time. I'm not sure anyone is really offering this yet.
>Is there a future for physical music?
Yes, but its role in the industry will become less. Probably physical music, like CDs, will become very expensive and luxurious and they will be like hardback coffee table books and people will only buy maybe one or two a year. The music industry's job is to make as much money as it can from a track or album, and that includes physical sales alongside digital sales, access services and anything else they can come up with.
>What do you think the music industry will look like in 10 years?
Probably very similar. But what we might look on as broadcasting income will hugely increase. Most revenues will come from users paying to access the content. You won't notice that you are paying for recorded music so much.
I think the artists ought to be much more powerful, whether they will get it together is another matter. There will be record labels, but whether they will be labels that own content or just be agents I don't know. They might be more like the Performing Rights Society and less like Universal.