MIDEM’s Afternoon Sessions: The Life/Death of CDs; Banning The 'C' Word; The Anti-360 Deal

Above: Andrew McGregor, presenter, BBC Radio 3, Antony Smith, business director, Nimbus Disc & Print Services, Chris O'Reilly, managing director, Presto Classical. (Photo: Lars Brandle)

 

HMV’s descent into administration could in turn expedite the death of the CD format, in Britain at least, delegates at MIDEM today heard.

The CD albums format still accounts for the lion’s share of album sales and recorded music revenues in Britain. And in the classical music genre, in particular, CD remains the king. Speaking on the afternoon panel session entitled, “when traditional retailing still works,” panelists agreed that the CD was still a viable, money-spinning format and should continue to play a big role in the business for at least five more years.  The collapse of Britain’s famed retail chain could squash all that.

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HMV recently went into administration and its debt has been taken-on by restructuring specialist Hilco. The situation for HMV was “worse news for the majors than the indies,” noted Chris O’Reilly, managing director of Presto Classic in the U.K. “But I’m concerned it will accelerate the major labels away from physical, which will mean lost sales in classical.”

O’Reilly and his fellow panellist Antony Smith, business director at Nimbus Disc, clearly had a fondness for the CD which was based on reason. Their product – classical music -- still has wide appeal to their customers.

“We’ve got a good 10 years of CD retailing,” said O’Reilly. “Within 12-18 months we should have a comprehensive digital offering. But we need to cover-off all the content first. You can’t find anything you want on Spotify (in classical). CDs are what we sell the most of, and CDs are what we expect to sell the most of over the next five years.”

Smith was even more optimistic. “The record industry has always operated off multiple platforms.  We’ll continue to sell CDs as long as people want them. CDs will be the last physical format for audio, and non-movie content. But it could be around for 25-30 years.”

Smith explained that his company’s financial outlook was stronger with an approach that took it deeper into catalog by reinstating titles with small runs – a classical music long tail in the physical format, if you will. “We reintroduced 750 titles that had been deleted by previous management and accountants. We have 1,800 titles available now. It’s more expensive. But the cash flow benefit is vast. The cash flow comes back immediately. If you deleted back catalog recordings, you’re deleting your profitability. Harvesting the sales in the back catalog is [the way forward].”

It’s rare for the CD to grab much discussion time at Midem, a conference which strives to look to the future. It’s rarer still for the physical format to be spoken of with such a positive glow. Certainly, the CD wasn’t on the agenda on any of the other sessions throughout day one.

Timon Birkhofer, of Capital C, Benji Rogers, of PledgeMusic, Alexandre Boucherot, founder, Ulule. (Photo: Lars Brandle)

During the early-afternoon’s crowd-funding workshop, PledgeMusic founder and CEO Benji Rogers gave a passionate performance on how to involve the fans throughout the process of making music. Rogers fleshed-out the anatomy of a Ben Folds Five campaign on which his company worked, a project which connected with fans from early on, was profitable as it dropped, and ended up being released through conventional channels.

“I encourage any artists out there to abolish, ban the word ‘consumers’ from their vocabulary. They’re your fans. That message has to change,” he said. “You can involve your fans in the release of that music. One of the things we’ve done is to elongate this process to involve the fans. If you look at the life cycle of the campaign, demos, through to release for pre-sales, everything in that process become marketing points. It’s about monetizing.” Rogers told a full-house of information-hungry delegates to keep control of their data. Data, in the fan-building game, means money.

“Apple and Amazon, artists are giving all their data to these massive companies and they’re taking away 30% for doing this. It needs to be monetized.” And once the streaming industry truly builds in the crowd-sourcing and direct-to-fan experience in its fabric, “it’ll become so powerful. That’s where one of the biggest opportunities lies. Currently, explained Rogers, most labels have no idea where their customers are because they’ve driven them to all these other places. What I want to see is 100,000s of artists owning all their data and putting their content on these services. This is the future and there’s no other place this is going to go.”

Panelist Alexandre Boucherot, founder of France’s Ulule, gave his top-tip on how to approach fan-funding. “Be humble and understand what your fans are willing to do to help you. No matter how big your fanbase, find the best fit. They want to share in your success.”

 

Martin Franscogna holds aloft a "typical major label 360-contract." He later
held a flimsy "non-traditional" contact.
"Which would you choose,"
he said.
(Photo Lars Brandle
)

The theme of artists regaining control was also explored in depth during the session “the anti-360 degree deal”, presented by attorney Martin Frascogna, founder of Frascogna Entertainment Law. Frascogna identified a host of big bands and their upstart, non-traditional label structures which entered the fray as potential game-changers in 2012. The likes of Red Bull Records, Mountain Dew’s Green label, Hard Rock Records and Yamaha’s recording label were examined as types of anti-360 degree businesses whose main venture wasn’t to capture the artist’s copyright, but to associate with the act and sell products on the side through promotional activity. “Music is a great way to sell other things,” Frascogna said, quoting leading entertainment attorney Ken Hertz. “Artists are a business that can accomplish many things. You don’t have to zero in on just music.”