One topic was constantly on the lips of MIDEM 2011 attendees: The cloud. It is the foundation for feature-rich services on mobile devices, PCs and televisions. It allows an incredible level of interconnectivity between devices and services. Because data is stored offline, it is the logical foundation for the "celestial jukebox" that has been imagined for well over a decade. And since its arrival comes as digital download sales have lost their once-explosive growth, the cloud is seen as the bridge beyond merely selling files one at a time.
But is the cloud ready to deliver on all that promise?
YouTube is becoming considerable to digital distributor Believe Digital, says president Denis Ladegaillerie. At a Tuesday panel Ladegaillerie said that YouTube now accounts for 10-15% of the company's revenue.
But YouTube's contribution to the bottom line isn't the same across all companies. One executive at a digital distributor told me Believe's YouTube share of revenue was quite high. Although he would not pinpoint his company's exact YouTube numberd, he did say YouTube did not account for nearly as much of his company's proceeds.
Earlier in the conference, Forrester's Mark Mulligan argued that YouTube is digital music's only true killer app. Indeed, the popularity of the video streaming site is unquestionable. YouTube is unrivaled by other cloud-based music services and its reach far outstrips those of download stores. Take the incredible traffic generated by Justin Bieber. Between YouTube and Vevo (which streams about 90% of its videos through a partnership with YouTube) Bieber accounted for 1.07 billion streams globally in 2010, according to figures supplied to Billboard by TubeMogul. Lady Gaga had nearly that many.
And value can vary by cloud. In spite of the popularity of YouTube and Spotify (in those countries where they are available) the cloud sometimes feels like a race to the bottom. Ketil Schel of Sky High Productions in Norway told me one of his artists got about $6 from 250,000 streams on Spotify. He added that some labels and artists in his country are so disappointed by their Spotify payouts that they would rather put a song solely on YouTube. "At least that way they can show their faces to listeners," he explained.
Ultimately, the cloud will be only as productive as stakeholders' processes and procedures allow. A music service will be either limited or liberated according to the terms struck with content partners and how long it takes to reach those terms. Revenue will flow efficiently only if correct data is exchanged between parties. Judging from conversations and statements from panelists, both areas have much room for improvement. The cloud may be here, but it industry may not be completely prepared for it.