CES Panel Reviews 'The State Of Digital Music'

Rubey, Johnson, Boberg, Panama, Carson

A panel at International CES MONDAY afternoon (1/6) gave an overview of "The State of Digital Music," offering a range of perspectives from the artists' end to label and distributors.

Music industry veteran JAY BOBERG of ISOLATION NETWORKS/INGROOVES FONTANA and CANTORA RECORDS co-founder/MAINFRAME GROUP head NICK PANAMA stressed how passion for creating music will lead to making money, but BOBERG noted that "the challenge for the labels ... is how to change our revenue streams" in the face of 360 deals and other recent developments.

CBS INTERACTIVE's ERIC JOHNSON said that he thinks that there are "enough new (financial) models... that we'll see success" in digital streaming music such as his LAST.FM and competitor PANDORA.  VEVO Chief Revenue Officer JONATHAN CARSON voiced particular optimism in the increase of brands participating in the category, "a whole new stream of what we think will be very substantial revenue."

AEG NETWORK LIVE's JOHN RUBEY added that artists are seeing their biggest revenues in live events, and noted that big events like COACHELLA and the HYDE PARK SUMMER festival draw audiences rivaling small networks and touted festivals as new music discovery tools -- "you go to COACHELLA, you're going to find new artists."  "We're bullish about how people are spending money to buy tickets," RUBEY said.

Moderator PETER CSATHY of MANATT DIGITAL MEDIA VENTURES remembered his days at MUSICMATCH and noted that his company tried a subscription streaming service in 2004, but only recently has that form become viable, and asked the panel whether downloads are a dying breed and whether there is room for "more than a couple" of subscription services.

BOBERG agreed with CARSON that a small portion of the public has ever bought the music even before digital, but that the challenge now is that the people who are buying today are not spending $12.99 for a CD and are now moving from singles to subscriptions, changing the revenue stream.  Making the pie bigger, he said, "is really the only way it can work."

Asked by SCATHY whether he's an optimist about that, BOBERG said he is not, asserting that "the music industry steps on itself" (CARSON noted that while the industry debated whether subscriptions were a good or bad thing, "it doesn't matter what we think" because it's happening anyway) and warning that while "the subscriptions CAN work,"  if the people subscribing are just the same percentage of people that bought music in the past, the industry can find itself in trouble.

JOHNSON pointed out that broadcast radio is still a huge factor because "it works" and subscription services have the perception that they require "work" on the consumer's part.  Beyond that, he said, lies the rights issue, to which the streaming services are "beholden" for product.

The panel also discussed the revenue stream from selling "experiences," from merely live concerts to backstage access, with RUBEY noting that some artists want to reach fans in every way possible yet others won't allow digital releases of 30-year-old songs.

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