Artists will kick off about digital rights

Several artists have already clashed with their labels over digital royalties – for example the Allman Brothers Band suing UMG – but expect more rumbles in 2009. Not least because artists are potentially getting stiffed when it comes to the raft of new deals being signed by labels for unlimited, subscription-based or ad-supported music services. Expect managers to be pressing for fairer remuneration from these deals, with new bodies like the UK based Featured Artists Coalition to the fore as well.

More unlimited music services

Comes with Music (UK) and TDC Play (DK) were just the start. There’ll be many more examples of unlimited music being bundled with other products or services around the world in 2009. The unique aspect of these new models is that consumers appear to get the music for free; and ISPs, handset companies and brands are all taking an interest. We also expect to see DRM-free files becoming a selling point for these services if they can persuade the major labels that they won’t spur piracy.

ISPs under more pressure

One of the reasons ISPs are so keen to launch branded legal music services is the pressure they’re facing from the music industry to do more to combat file-sharing. And by that, we mean more than send out ‘educational’ letters scolding persistent file-sharers for their naughtiness. We predict more filtering at ISP level, if they can find filtering technologies that actually work. Meanwhile, we wonder if the recent Danish lawsuit in which an ISP was ordered to block access to The Pirate Bay will set a precedent for other markets.

The industry will wake up to web-based piracy

We wrote about the growth of Rapidshare and other online locker services last issue (27th Nov 2008), as well as the ecosystem of blogs showing people where to find copyrighted music on them. Web-based piracy – including browser plug-ins as well as these locker sites – will be much more on the music industry’s radar in 2009, even though industry bodies may prefer to keep focusing on P2P and BitTorrent in their public utterances on The Fight Against Piracy. There could be more GEMA-style legal action against the Rapidshares of the world, though.

The Torrent tipping point

BitTorrent is still a bit geeky, even though plenty of consumers are using the technology to download free music, films and TV shows. But in 2009, there’s something of a perfect storm building, with more users sitting on super-fast broadband connections, and more inventive ways of helping them find copyrighted content. If you think BitTorrenting is about downloading individual tracks or albums, think again: nowadays, people are downloading artists’ entire discographies at the click of a button.

Streaming and downloading to converge

You’ll hear a lot of blather in 2009 about The Cloud – the idea of accessing stuff stored online from any device you like. The impact on music next year will be to accelerate the blurring of the boundaries between streaming and downloading music. For example, iTunes might evolve into a cloud-based service, allowing people to stream their iTunes library to whatever device they’re using at the time, over whatever network it’s connected to. Third-party software already allows this, of course. The point is that consumers increasingly don’t care whether their music is stored locally or remotely, as long as they can listen to it right now.

Comes With Music to grow slowly

Nokia’s unlimited music scheme won’t definitively succeed or fail in 2009, but we will get a good sense of just how sustainable it is as a business model. It’s no secret that Comes With Music will roll out on more sophisticated handsets than the launch 5310 XpressMusic, and likely with at least one large mobile operator. However, we sense that Nokia may push the scheme more in emerging markets than in, say, the US. Watch for developments in Latin America in particular. We also have a mischievous thought that Nokia may ‘sign’ its first band in 2009, becoming a pseudo-label.

More DIY social media campaigns from artists

We expect artists and their managers to take social media by the scruff of the neck and dream up some really good online viral campaigns in 2009, alongside the efforts of their labels. Artists will be using the web in innovative ways because they’ve grown up with it, not because they’re following some kind of Web 2.0 marketing template. Although there’ll be plenty of people following Web 2.0 marketing templates too, in an effort to copy the (inevitably) more successful grass-roots stuff.

More high-end physical product

People don’t want to buy $15 CDs, but they are happy to buy an $80 luxury box-set collectible… things. Radiohead and NIN showed that, while US country-pop singer Taylor Swift has recently been doing great business with her own $60 luxury box set (sold off her own widget, incidentally). Labels will spend 2009 trying to shore up their physical revenues with more imaginative collections, whether it’s five albums bundled together, or an entire artist’s discography in a Blu-ray box-set.

Microsoft will launch a ZunePhone

It may or may not have the Zune brand attached, but we’re confident that Microsoft will get into the mobile handset game early in the year, likely at CES (January) or Mobile World Congress (February). The rumours are pointing to a consumer-focused handset with an emphasis on music and messaging. We also predict hundreds of ill-advised claims that whatever comes out is an iPhone-killer.

More mini-albums and live EPs

The album isn’t quite dead yet – indeed, Amazon is actively promoting the idea of buying whole albums from its MP3 store. But we predict more mini-albums following in the footsteps of Coldplay’s Prospekt’s March, filling the gaps between major releases. Although whether that’s a positive trend or an example of fleecing fans for songs not good enough for the album is a matter of some debate. Meanwhile, intense competition among digital stores will see more exclusive live EPs and remix packages, thrown together to get homepage promotion.

Subscription services are dead

At least in the form we’ve understood up until now. The only way for services like Napster and Rhapsody to survive is by being bundled into the price of other products – home streaming systems, maybe, or mobile handsets, or computers. In short, they’ll shift to being unlimited music services akin to Comes With Music or TDC Play, as part of a bigger offering. The only company that can make subscription work in 2009, we predict, is Apple. If it chooses to.

Streaming startups thin out

Can you really turn a profit from ad-supported streaming music? If you can, why are so many of the popular sites up for sale? 2009 could be a harsh year for the iLikes and Imeems of the web, despite their millions of VC dollars, millions of users, and seemingly firm partnerships with major labels. We see many of these services selling up to larger companies who can afford the royalty payments, in the face of competition from CBS-backed Last.fm and Murdoch-backed MySpace Music.

The next Radiohead won’t be Radiohead

But at least one big-name artist will do something innovative in the digital space, probably after leaving a major label at the end of their contract. But it won’t be the same honesty-box offering as with Radiohead’s In Rainbows. We’ll be keeping an eye on firms like Topspin Media or Mubito and the artists they’re working with to try and figure out what the innovation will be.

The next Rick Astley won’t be Rick Astley

There’ll be another forgotten artist revitalized by The Power Of Viral Internet in 2009, following the rickrolling craze this year that led to Rick Astley being named best artist ever at the MTV Europe Awards. Who it’ll be is another question. Our suggestions include Tiffany, Jive Bunny, Ted Nugent and Menswear. Or all of the above.

Labels will intensify their Direct to Consumer efforts

The majors have been notably unsuccessful in selling digital music direct to consumers in the past, but EMI’s launch of a D2C website this month show that they haven’t given up on building direct relationships with fans in this way. However, the interesting aspect here isn’t huge all-encompassing portals selling a label’s entire catalogue, but more the slicing and dicing of this catalogue and monetizing it better.

The growth of emerging markets

We’ve already mentioned how Nokia may target emerging markets next year; but with the recession biting in the west in 2009 we expect to see stronger performance coming from Latin America; the BRIC countries (it’s an acronym you’ll need to know in 09) and Africa where mobile is seeing huge growth.

From Music Ally, a great digital music information service.

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