Billboard Readers' Survey Results, Part 3: The Most Important Issue Facing the Music Biz In 2014

As part of our year-end special, we asked you, the audience three specific questions about 2013 -- and we got dozens of thoughtful, intelligent, well-considered responses. Rather than dropping all of that knowledge in one big pile, we're publishing question responses over the next week. (Click here for Billboard.Biz's Reader Survey Results, Part 1: 2013's Most Important Music Business Events  Billboard Readers' Survey Results, Part 2: Most Influential Music Artist of 2013 results.) Thank you to everyone who took the time to respond and happy holidays.

Up next:
• Your favorite album/song you are not affiliated with; and your favorite album and song you are affiliated with.

Question: What will the most important/influential issue facing the music industry be in 2014?

Michael Huppe, president/CEO, SoundExchange
There is no issue more important than getting a terrestrial performance right in place for traditional radio (AM/FM) to pay recording artists. Unlike all other radio platforms, AM/FM radio does not pay for sound recordings. The U.S. is only industrialized nation that doesn’t recognize a performance right and this must change. Overall, we can expect a deeper look at current music copyright laws from numerous perspectives in 2014.

Max Gayle, manager of artist development, Island Def Jam Music Group
Same issue from 2013: selling music in a physical format. Soon enough, Walmart, Best Buy and Target will no longer care to carry physical product in their stores due to low profits.

Ben Stauffer, finance director, Centricity Music
I think that 2014 will be a landmark year in the Access vs. Ownership debate. With album sales likely to finish this year down about 8%, including digital albums being flat, and track sales down about 4% over 2012, I predict that we've seen the last of year-over-year growth in "TEA" sales, barring another Adele "21"-like release. Labels and artists will need to react quickly to the changing tide to rework their business models in an industry, which is becoming more dependent on non-sale revenue streams.

Colleen Theis, COO, the Orchard
Successfully managing the consumer shift toward streaming consumption models is an extremely important topic across the industry. 2014 promises to be an exciting and variable landscape, with an unprecedented level of choice in services for consumers and reach of those services across the globe.

Salaam Remi, executive VP of A&R and production - and CEO of Louder than Life label group
Finding the balance between streaming and actual sales. So many artist are making it by not selling music and touring. The music is becoming a byproduct sales-wise. But the record company is bearing the cost of creation and marketing. Getting peoples’ attention to consume an entire LP is tough, unless you're standing in front of them.

Van Toffler, president of Viacom Media Networks Music & Logo Group
How to successfully navigate through all the social clutter and establish meaningful relationships with fans. There has never been more music out there, which is great for fans, but can also cause confusion. We need the guideposts and curation to help us through.

Tom Corson, president/COO, RCA Records
The opportunity for streaming/subscription to truly scale our business and to explain why it's healthy for everyone in the food chain, especially artists.

Chris Vanderhook, COO, Myspace
There's a friction between consumer demand for free (ad-supported) streaming and the cost of making that music available to them. The current model is not sustainable and some predict the demise of these streaming services entirely. But labels rely on streaming services for hundreds of millions of dollars each year and one thing that history has taught us is that consumers dictate to the market, not the other way around. Music consumption is up, but purchasing is down and subscription growth is stagnant. There's a tension in the content creation-monetization paradigm -- a tension between consumers and the music business. The sides are too far apart. What needs to happen (and is inevitable) is innovation to create a new system that works more effectively. In 2014, we won't see labels die and we won't see them bleed streaming services dry, either. We'll see new forward-thinking models presented to consumers -- accounting for both market demand and the cost of supplying that demand. It's less a zero-sum game than it is about breeding another cycle of innovation.

Jim Donio, president, Music Business Association
2014 is already primed to be the year of streaming music. Three major new services -- Beats Music, Deezer, and YouTube MusicPass -- are expected to launch this year, and Spotify just announced new free, ad-supported tiers for tablets and smartphones, which should help to significantly increase its membership base. With this in mind, it is even more imperative that the industry develops proper methods for measuring streaming plays so they can impact existing sales data. Streaming will only become more prevalent as the years go on, and these services must be included in our regular metrics in order to give us the best picture of the true state of the business. However, none of this can be accomplished without improved data standards, which will be required to alleviate existing digital supply chain and metadata issues regarding unique IDs, artist disambiguation and more. As streaming grows, these issues will become more pronounced unless we do something about it, which is why the first-ever Music Industry Metadata Summit took center stage at Music Biz 2013, where we issued our Music Industry Style Guide. Under the auspices of the new Music Business Association's Digital and Information Technology Sectors, these issues are prominent on our workgroup agendas for the coming year, and we’re also planning a data-focused event to bring thought leaders together at Music Biz 2014 in May.

Liana Huth, senior VP of partnership marketing, Fuse
Mother nature.

Greg Hill, president/CEO, Hill Entertainment Group
How many more festivals can we support? We have already seen consumers pushing back with ticket price manipulation; at a certain point they will have to make a financial decision on where they spend their money. We will reach a tipping point in the business in our competition with ourselves and other entertainment options.

Julien Mitelberg, CEO of Bandsintown and COO/co-founder of Cellfish
The relationship between artists and brands will continue to evolve, with more strategic partnerships put into motion. We will see more collaboration in 2014 along the lines of Avicii and Ralph Lauren or Bandsintown and Zippo. The notion that artists are "selling out" is slowly fading, with more artists openly courting partnership in the same way that athletes and brands have worked together.

Joe Riccitelli, executive VP/GM, RCA Records
Being able to give developing artists the time they actually need to develop instead of sling-shotting them. Radio talks about being in the developing artist business but do not want to give them the time to develop.

Rell Lafargue, COO, Reservoir
For publishers, three major events are anticipated to rock the industry in 2014:
1) Constitutional legislation. The proposed changes to sections 114 and 115 of the U.S. Copyright Act would create a willing buyer/seller rate standard in relation to statutory mechanical royalty rates, and allow ASCAP and BMI to introduce market evidence when negotiating standard performance rates.
2) Music video licensing and monetization. In 2014, Sony will offer a blanket license for its music videos. Sony will be the last major label group to fall in line with the trend, doing away with the traditional justification that music videos are subject to an artist’s controlled composition language, thus making their usage promotional/free. A settlement is also anticipated with online media networks Fullscreen and Maker Studios to award publishers royalties for previously commissioned videos and provide licensing opportunities moving forward.
3) Direct performance licensing. Sony/ATV (including newly acquired EMI) became the first music publisher to pull its catalog from ASCAP and BMI, and strike a deal directly with Pandora. This allows them to set a digital performance royalty rate as they see fit, instead of being subject to the consent decrees to which ASCAP and BMI are held. Universal and BMG have been rumored to do the same in 2014. If they do, it could kick-start a trend throughout the publishing world of direct licensing with Pandora and other streaming platforms.

Matt Pincus, founder/CEO, Songs Music Publishing
How to deal with the explosion of data without commensurate revenue growth to build capacity to handle it. Five years ago, when digital music services were nascent, the business was largely defined by policy and rate issues. Now, with tens of millions of users streaming billions of songs, it is a tremendous operational challenge. The infrastructure to handle the transaction volume is not yet in place, but the market is exploding. So we don't have the luxury of time to figure it out. 2014 will be a critical year.

Roderick Scott, manager of publicity and lifestyle marketing, Warner Bros. Records
Access to unlimited content will be the next big thing. In a world where music is highly disposable or nothing more than a very well produced glossy ad, exclusivity will be the next way to capitalize on the tide of information that is spewed out daily.

Wendy Washington, executive VP of artist and media development, RED/Sony Music
Working with digital service providers to figure out how to get consumers to embrace the digital subscription model in big numbers. Also, working with tech/DSP's (iTunes, Spotify, Rdio,etc.) to create marketing/promotions opportunities for artists as well as meaningful curated platforms for new artists, and new music discoveries- beyond algorithms.

Peter Jesperson, VP of production and catalog, New West Records
Getting artists properly paid for their work.

Dwight Lazarus, manager of brand partnerships, Island Def Jam & Republic Records
The most important issue facing the music industry in 2014 will be continuing to control and stop piracy of all music.

Madelyn Scarpulla, GM, Loud & Proud Records
Subscription model issues: Constant debate and uncertainty about how it will play out. It may not be solved in 2014, but the issues and debates about the subscription model and all the competitors will certainly be a major issue in the coming year.

Lauretta Charlton, publicist, Joe's Pub
Festivals are an important issue facing the music industry in 2014. SXSW can't continue to be the only major festival for industry peeps every year. We need something new.

Eliot Van Buskirk, editor, Evolver.fm
In a business sense, the most important challenge is that music is still too expensive to be free, and too free to be expensive. In a cultural sense, music's identity as standalone art -- separate from a video or on-stage performance or a branding campaign or a video game or an advertisement or a viral video -- feels besieged.

Ros Earls, founder/owner, 140db Management
Trying to make sense of streaming financially.

Andy Cohn, president/publisher of The Fader
Is EDM a bubble that is about to burst in 2013 or is it the soundtrack of the 'next generation'? Will EDM artists ever earn respect and stardom to the level of artists in other genres of music, or will it continue to be relatively faceless with questionable credibility.

Mary Jurey, GM, Playing In Traffic Records
Like society in general, I think it will be how to sustain as a band or solo artist in a middle class way. It is increasingly difficult for a new artist to maintain a career in the music industry and build. How do you survive without selling a million albums or tracks?

Sarah Cunningham, senior director of media relations, The Chamber Group
I think it will be the continued issue of artist development. We cannot skirt that step and we cannot ignore that it is still a crucial element and one that should be on going. An artist can have a huge digital presence and something can take off virally -- such as a song or a video -- and/or the artist can garner plenty of early buzz right out of the gate, but that doesn't mean that the artist will have a big single, a great record, become a legitimate touring artist, get branded deals and publishing deals, grow with their fans, and carve out an entire career. We have gotten used to, and excited about, how quickly things can happen due to the digital landscape, but artist development is still important, especially for a long lasting, true career. Sure, social media can have immediate impact on the charts and awareness, but that doesn’t mean that impact is going to last forever or get your artist past the current release.

Robb McDaniels, founder/CEO, INgrooves
Without a doubt, I think it will be the consumer adoption of streaming subscription services and the impact to how artists get paid, over what period of time and how much. The entire cash flow structure for the industry will shift and impact everyone in the ecosystem, at least until critical mass is achieved on these services. In the long term, it will be good for all of us.

Marcee Rondan, senior VP, MSO
On the festival side, it seems we're running out of headliners. Where and who are the next generation of rock bands? We have a few: Coldplay, Pearl Jam, Kings of Leon. But who are the next round of headliners, maybe Arcade Fire? Generationally, it seems we're dealing with groups with one big hit. Where are the career artists?

Tom Gimbel, GM, Austin City Limits
In 2014, the expansion of iTunes Radio and YouTube Music will affect the long-term viability of Pandora, Spotify, and Rdio.

Inge Colsen, publicist, Girlie Action
It’s nothing new, but the issue to break through the immense clutter and chatter.

Rey Roldan, president, Another Reybee Production
I still have to go with learning how to cope in a music-as-free-commodity environment.

Laura Swanson, executive VP of media and artist relations, Island Def Jam
Streaming. How to monetize, how to capitalize, how to incorporate into all of our charts and successes. With the continued success of Pandora and Spotify, and with the January launch of Beats music, streaming is sure to be the No. 1 topic of conversation for 2014.

Will Mills, VP of music and content, Shazam
As always, finding great artists and songs, and working out the monetization. But now from not just traditional sales, touring, brands, but also new areas such as technology and the wider media.

Dmitri Vietze, founder/CEO, StoryAmp.com
How will the emerging music industry create a new infrastructure that helps fans discover music and helps artists build fans, given that the old broadcast model is fraying significantly?

Mercedes Davis, CEO, Freshboy Productions
After a high number of ground breaking partnerships in 2013, it is very exciting to see what and who are involved in the next groundbreaking partnerships. Now having agreements where artists are not able to get dropped based off one mistake, and brands are not in full control.

Brenda Bottomley, manager/owner, Tulpa Records
The most important and influential issue facing the music industry in 2014 will be the rise of the independent artist. More musicians are becoming more business savvy and informed.

Caesic Brox, chief marketing and financial officer, Raleighwood Records
The music industry is healthy. (Mind you, I'm 23 years old, so my idea of healthy is relative to my perception of the industry over the past few years, not the "golden age" I keep hearing and reading about). I think the most pressing issue, however, will be terrestrial radio becoming more fluid and adapting to the trends of the day, rather than remaining an exclusive promotion partner of the big distributors. Young listeners have flocked away from terrestrial radio for this very reason, and if the stations continue to ignore this, they will be as doomed as “American Idol.”

Stephen F. Goffreda, program director, 92.3 FM WYRC-LP in Spencer, WV
Monetizing streaming in a manner that compensates for the decline in the sale of physical media and digital downloads. A side issue to that is keeping broadcast radio relevant.

George Littlejohn, co-CEO, Purpose Music Group
Getting Spotify and YouTube to pay the artists and the labels a much greater share of the revenues they are earning.

Miles Anthony Williams, CEO, Righteous Music Media
The lack of R&B music and R&B radio, as well as R&B artists. Illegal downloading and Spotify.

Grace Jones, founder, REQUIEM media
Finding new ways to make money.

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