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SXSW Panel Discusses the Real Value of Music
Tuesday, March 11th, 2008 at 4:00 PM - by John Martellaro
Some teenagers have never known a time when music wasnt available for free. A South by Southwest Media Conference panel recently discussed how the industry can compete with the idea of free music.
During the SXSW panel discussion, described by Kyle Monnson for PC Magazine, the topic was the explosion of sites that are offering music free, legally. Given that so many consumers are accustomed to free music, new business models must emerge to take into account that sea change in mentality.
"Well, its still a very new business," Simon Wheeler, director of digital for Beggars Group said. "And as with any new business, theres a period where its got to mature and the revenues have got to mature. Theres a certain value to music and when we negotiate with these new businesses, weve got a fairly clear idea what that value is.
"I think thats the difficult part," Mr. Wheeler added. "The CPMs arent enough right now to cover the value of the rights. Weve got a responsibility to our artists to deliver value back to them, so were trying to license to as many places as possible but to do it in a responsible way."
All kinds of new business models are being explored that involve social networking. Customer perceptions of music may force a change from the traditional retail experience to a social networking experience where ads are used in an indirect way. In some ways, its like the traditional TV business model.
The subscription model was also brought up. Its well known that Apple, notably, Steve Jobs doesnt like the idea of subscriptions. However the business model of a service subscription, paid as a routine monthly bill, fading into the background of life, works well with the idea of music perceived as free.
As the business models change to account for changes in consumer thinking, the question keeps cropping up: Whats a song worth? While Apple is one of the few who can pin it down on the retail side, those who are working on the social networking business model are still trying to figure it out.
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