The Free Music Debate

The ongoing battle over music licensing and revenue sharing has been producing new ideas, business models and even some contradictory statistics. Free music seems to be on the rise, as major labels supported Google’s free music download service in China last week. But PRS for Music, which criticized Google for trying to pay artists unfairly, reported that UK musicians are doing better than ever, and earned $30 million more from licensing and tours in 2008 than the year before.

In an attempt to evolve with the times, the Future of Music Coalition (FMC) published an article describing principles for artist compensation in new business models, while EMI.com went ahead and started offering registered users free access to pre-release content. Royalty collectors are asking for more money, but if music is headed towards free access, where will the money come from?

Record labels say that in China, instead of earning money from directly from sales, they will share advertising revenue with Google. “The level of online advertising in China is quite mature, so we’re willing to try this out,” said Sandy Monteiro, a senior vice president of Universal Music Group. Google’s free music model is exclusive to China, but it’s reasonable to assume that if it works there, it could work in other countries.

Free music, supported by advertising, is the probable outcome of the copyright wars, and EMI Music isn’t falling behind. EMI launched Your Soundcheck, a data collection service which invites users to listen to exclusive pre-releases and give direct feedback to the company. Capitalizing on listener’s suggestions, while giving access to free music, is a smart move.

UK artists earned a total $205 million in 2008, up from $178 million the previous year. Barney Hooper, PRS for Music’s head of PR, explained that “I think we’re (…) getting better at liaising with our equivalent societies around the world for collecting.” However, if online revenue comes from advertising, they are subject to the rules of that business model, not the “pay-per-play” model the royalty collectors wanted. The best effort to assume a new position has been made by the FMC, as its principles include “equal access to new business models”, and represent “indie or unaffiliated musicians.”

Labels seem happy with advertising revenue, but the cake might not be big enough for the royalty collectors. That’s probably the reason for so much conflict, especially if artists are feeling shut out of the dealings. However, the reality of free music online has been established, it’s been available since Napster, and Google’s revenue through advertising solution shouldn’t earn so much resistance.

Licensing organizations are hurting themselves by delaying the inevitable. The question remains as to whether advertising revenue will be enough to go around. Ultimately, people won’t stop composing, and music will not die. But greedy corporations might.

Photo via chinapost.com.tw
Source: BBC, NYTimes, Hypebot