Legal Drama At MidemNet Opening Keynote

It was a case of back to the future at the opening keynote debate at MidemNet in Cannes as one of the speakers from the digital business was unable to make the opening session because of litigation.

MidemNet, the music conference focusing on the digital business, began a decade ago when labels were busy suing new services such as Napster. Michael Robertson, who was then involved with his service, has now returned to the digital business with MP3Tunes, an online music locker, and is still running into legal issues with the majors.

Speaking from San Diego via the Kyte channel, Robertson, CEO of MP3Tunes, told the audience: "EMI has sued me for providing private storage for your own music on the Internet. It's a very serious matter and that's why I'm not there [in Cannes] in person."

Robertson said EMI had taken legal action to shut down the company's servers.

Douglas Merrill, president, digital business, EMI Music, earlier responded on Robertson's blog by writing: "Since we're in the middle of litigation, I can't respond to everything here, unfortunately. However, as we've said many times in the past, EMI is more than willing to discuss a reasonable resolution to this. If I can help with that process, I'm happy to. Please feel free to set something up -- I think our attorneys know each other well by this point and can schedule something."

The "Lessons for Today and Tomorrow" opening keynote debate had been billed as a clash of the technology and recorded music business, in the form of Robertson versus Eric Nicoli, former chief executive of EMI Group and now chairmen of Vue Entertainment and R&R Music. However, both agreed that business models would have to be transformed, while Topspin CEO Ian Rogers defended the activity of tech companies.

"The way the revenue is generated has to radically change," said Robertson, with more subscription services and ISPs serving as a conduit "if the industry can show them a way to make more money."

"There are still too many people in the industry who want to keep a tight fist on how people interact with music," he said.

"I agree that in the future revenue will be generated in different ways," said Nicoli. "Any business model that depends exclusively on sale of records is going to be extremely challenged."

However, he added that the majors had never thought they could "sue their way to prosperity" in the various litigation actions several years ago, and pointed to his own role at EMI in being the first major to introduce DRM-free music.

Robertson showed no signs of mellowing towards the majors, commenting that commercial innovation in the digital space was being "stifled" and that licensing from labels was a "painful, laborious process."

He predicted the "complete decline of recorded music sales" including digital, and claimed that it "won't be an Apple-dominated world in the next 10 years."

Robertson also claimed that the future innovation would come from "the dark side of the internet" where he believes services are showing the industry where to go. "The industry would be well served by spending some time on Pirate Bay and giving them commercial options," said Robertson.

Rogers said that "DRM coming off is going to be a big part" of the future development of digital music services.

Nicoli noted that while recorded music is in decline, "the industry is not in decline - publishers are doing well and live is doing well."

But he admitted that some opportunities had been missed in the past decade to monetize music fans who were consuming digital music. "Clearly mistakes were made, as they are in all industries," said Nicoli. "This industry is essentially change averse, essentially technophobe. They were unhelpful traits when the digital opportunities arrived."

At the following "Why Knowing Your Fans Matter" debate, Cory Ondrejka, SVP, digital strategy for EMI Music did not comment on Robertson's remarks but did talk about EMI's relationship with its artists' fans, particularly via the new portal.

"For us, it's first looking at what we can fix in terms of how EMI handles music," he said. "There's learning that can happen. Making that process efficient is really our first task."

MidemNet continues today (Jan. 17) - check back at for regular coverage. The MIDEM international music market and conference begins Jan. 18.

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