Analysis: 5 Reasons Why 2010 Will Be Revolutionary For The Music Biz (Big Media gets bigger)

Billboard ^ | January 12, 2010 | Glenn Peoples, L.A

[a fool in paradise]

This year will host numerous events that could well change the course of the music industry. From the future of music giant EMI to the impact of the Performance Rights Act, many events that will occur in 2010 could have deep, long-term consequences. In no particular order, they are:

1. The Ticketmaster-Live Nation Merger If the Department of Justice gives the merger a greenlight it would instantly create less competition in ticketing in the near term as Live Nation’s fledgling ticketing division ceases to be a competitor to Ticketmaster. In the long term, a combined Ticketmaster-Live Nation will be able to sell new entertainment packages in novel ways. Competitors may form partnerships and coalitions to act as a counterweight to the merged companies’ market power. In addition, the merger will inspire similar pairings as other companies jockey for competitive advantage. A denied merger will lead to greater competition in ticketing as Live Nation will continue growing its ticketing operations and the two companies will continue M&A activity in an effort to build for the future. Either way, both ticketing and promotion will never be the same.

2. The Performance Rights Act Changes Radio In October 2009, the Performance Rights Act made it out of the Senate Judiciary Committee. The House passed its version in May. Although there is solid opposition, chances are good that Congress will vote on the bill in 2010. The Performance Rights Act would give both performing artists and owners of sound recordings royalties for performances on terrestrial radio. (Currently, only the composition merits a performance royalty.) Webcasters and satellite radio pay such royalties, but terrestrial radio has always been exempt. The added expense comes at a bad time for a radio industry suffering from an advertising slump and shifting consumer behavior. How much money the record labels will collect is a big question. It’s logical that radio stations will take measures to limit their royalties. That may mean more talk radio or fewer songs played. Regardless, terrestrial radio will never be the same.

3. Internet Service Providers Become Partners This will be the year Internet service providers become content partners rather than adversaries in the battle against piracy (mostly in Europe, where legislation will make partnerships more like shotgun marriages, but eventually in the United States as well). Partnerships will beget a new era of music services. As tends to be the case, however, the first entrants may not score a breakthrough but better services will appear and eventually the ISP will be an important and obvious point of contact for music-loving consumers. Aside from the possibility of reducing piracy, partnerships with ISPs have the potential to reach multitudes of light consumers who outnumber heavy users but spend little or nothing. The industry is busy extracting more value from the most passionate of fans (the heavy spenders). The real pot of gold will be found in reaching tens of millions of light users through ISPs.

4. Spotify Will Raise The Bar For Mobile Music The celestial jukebox—access to all the world’s music—has been imagined for more than a decade, but the game-changer that fans and the industry have long desired will be a reality in 2010 if Spotify opens shop in the United States with supporting apps for the iPhone or Android. Spotify only has the music that the company has licensed (rather than a true “celestial” catalog of all recorded music) but its user-friendly interface puts it well above the competition. When people dreamed about unlimited access to music in the ’90s, they imagined something like Spotify on a mobile phone and PC.

5. Almost Any Way You Slice It, EMI Will Reshape The Industry Whether it soars or is sold, the scenarios regarding EMI that will play out this year will reshape the music industry. Terra Firma, the company’s private equity owner, could slowly maneuver the company to profitability—and thereby offering a blueprint on how to turn around an ailing record label—merge EMI with a competitor, or sell off one or more of its divisions—thereby changing the music landscape and increasing consolidation in recorded music or publishing. If Terra Firma somehow restructures EMI’s debt, 2010 may look less revolutionary and more like 2009. But since private equity owners don’t intend to stick around forever, change is going to eventually come.

[a fool in paradise]

Music Monopoly BUMP

[nagdt]

If passed ...a huge disaster for radio stations and broadcasting companies in the US...and especially the listeners. I work in the broadcast industry as a consultant and have never spoken to ONE SINGLE person who was on board for any of this garbage. Record companies should be making donations to radio for playing their garbage. They’re just biting the hand that feeds them. Stupid.

[RobRoy]

I have an android phone. I use it as a music player. I just plug it into my computer and it becomes a hard drive. I then dump all the songs I got off Limewire and I’m ready to go. Heck, most of them even end up with album art. ;)

[Sparky21555]

I download sheet music from the net, even though there is the disclaimer for educational purposes I wonder if this too will be affected.

[a fool in paradise]

As Big Media tries to overtake the ISPs (either by taxing data streams or owning a stake of the companies), you’ll probably be affected some day.

I don’t find any of Big Media’s monopolies to be a good thing for the public or for musicians.

[MikeD]

EMI has debt? They own the rights to the Beatles recordings — the second hottest selling act of the 2000’s (and probably highest dollar grosser, given the price of their CDs). Anyone who can make money off of the Beatles and still go broke deserves to fail...