How have the mechanics of royalty collecting changed?
Publishers and record labels are now getting a huge number of transactions with the use of their content, for example with Spotify, but with relatively small amounts of money. And they have a fiduciary dutry to distribute that money to their customers – the artists and the composers. And it’s getting very complocated and difficult because, imagine you’re a Spotify user and you are paying £10 a month for 40 hours at about 20 songs an hour – that’s 800 songs, 800 songs which you’re getting for £10. That is then distributed between Spotify, the record label and the publishers. You can see how that model becomes a challenge to the industry.

Are there more people playing a business role in the music industry than ther were 15 or 20 years ago?
There are more players extracting funds from the pot than there were before. When the CD revolution started in 1982, there was a handful of players who had most of the value. The problem is, it’s become a market where it is very difficult to make enough money to cover your operating costs. And there are new players who we never foresaw, who are doing very well. For example whoever thought that iTunes – Apple – would be a very profitable part of the music industry? So I think the market is fairer and the barriers to entry are significantly lower than they used to be, but I think it’s still tough in the music industry for many companies to succeed.

Did the industry move too slowly in the face of the digital revolution?
On the recording side, the small labels have adapted faster, and the big record labels have taken too long. When they were in the plastics business – selling a CD for £7.99 at retail and manufacturing and distributing – the margins were there to cover their costs. Now they are selling, say, three of the tracks of an album on iTunes for 79p each, and iTunes is keeping 33% of that. There isn’t enough margin in that to cover the operating costs that they had before. What a lot of independents are doing is deciding which elements of the business they can still do, and let the artists self-service, or find help with the rest. They are the ones that are able to adapt.

What are you hoping to gain from your visit to MIDEM this year?
MIDEM is the best trade show by far. It is the show where we meet our customers, very senior people in the music industry, and we get a feel for what the trends in the music industry are. And the fact that it is in January, it’s early enough in the year to allow you to make adjustments. So this year we hope to pick up new business through having face-to-face time with customers we might not otherwise meet. So it’s a true market, where we can buy ideas and concepts from custoemers, and sell our goods to customers and prospects. 

We encourage you to see the original: http://issuu.com/midem/docs/midempreview2011online (on page 34)