Why the music industry must keep its eye on the prize

Majors and indie labels alike must ensure that talent rises to the top in the fractured world of music marketing

My generation: the industry is learning how to respond to music downloads

The music industry lives in paradoxical times. There has never been so much consumption of music, so many people to whom it is a necessary and daily part of their lives, and there’s never been a time when so much exciting new music is getting created.

Yet the industry is depicted as being in its death throes, and every defection by a Prince, a Radiohead or a Madonna from the ranks of the majors is seen as the beginning of the end, rather than an admirably modern and lateral approach to a successful career.

The internet has brought its problems. The web has massively increased consumption while decreasing revenues, and has proved elusive to monetize. These are not the record industry’s problems alone, and solutions will emerge, not least as bigger and less vulnerable industries such as Hollywood, miraculously untarred by the brush that has painted the major record industry black, bring their might to bear on the problem that the purchase of copyrighted works has become a voluntary occupation.

Which is hardly fair, but not new. We all taped music when we were younger, but now it's easier and faster, and better quality. The industry clearly needs legislative help here, and in turn it needs to contribute a liberalisation of attitude to allow fans to copy and share music for personal purposes, while revenue streams for music makers are created from those that profit from such activities. What it does not need is what the Government is currently proposing: an uncompensated legal right to copy music.

The peak days of the turn of the century may be gone, but that doesn’t mean the business of making music is not viable in the future – if we want great new music to continue to be brought to us, it has to be. For every Prince who can do without a record label, there are a thousand new artists who need that expertise and investment.

Amazon and iTunes have brought brilliant consumer offerings to the market, and provided great value, appealing, and informative ways of discovering and buying music. Services such as the Album Club and last fm have brought us new ways of being informed and advised.A new generation of independent stores, led by the wonderful new Rough Trade East, can and will lead you to musical nirvana with knowledgeable advice and recommendation.

Between them and the supermarkets lie the specialist chains that have created the CD boom. Whereas Rough Trade will stock maybe a quarter of the national top 50, and make a success out of exposing music outside that space, and supermarkets just sell the hits, these stores risk falling into noman’s-land. They won’t beat Tesco on price, nor Rough Trade on specialist knowledge and range, but they can revive by bringing music back to the front rather than relegating it to the back, by employing staff who have a knowledge of what is out there, and through great presentation and marketing.

The major labels are in economic transition, and it’s hard for them. However, they are not corporate devils, and are largely still populated by bright and creative people who care about music.They are suffering from having been the kings of the jungle at a time when the other animals became empowered.

The best of them are brilliant marketing and packaging corporate machines for popular music, as Sony/BMG have proved with Leona Lewis, and Universal with Amy Winehouse. Where they fail is where they try to be what they are not, and attempt to buy credibility through their artistic associations. Fans are not that stupid, and those artists who aren’t prepared to be aggressively and commercially packaged, marketed, promoted and sold should stay well away.

The scale of the record industry is now back to what it was in Prince’s 1999 (a level we all loved at the time ). What has changed is that the big are no longer so big, and we have the long tail. As the industry commentator Bob Lefsetz said: “People still want music. In prodigious amounts. They just don’t all want the same thing. So, if you’re operating on a smaller level, there’s still a market out there for you. Don’t overspend, know it takes time for people to catch on to you. And know that being as big as The Beatles, even the Backstreet Boys, is presently an impossibility.” Good advice.

Which brings me to the part of the market that I live in, the independent sector. This is clearly also under threat, not least from the same quarters as the majors, although having more committed fans means less unpaid-for music, but also from the majors themselves, as their quest for market dominance threatens everyone else’s ability to get music in front of fans.

But this sector is naturally better suited to today’s more splintered market, and sends wave after wave of new hopefuls over the top into the facing guns. While many fall, some prosper, and those that do can make us fall in love. The sector is aided by the majority of artists who want to express their art on their own terms while not playing the corporate game, and don’t necessarily care about huge numbers.

HMV’s critics’ poll of polls at Christmas showed these 10 albums as the best of the year:

1. LCD Soundsystem, Sound of Silver

2. M.I.A., Kala

3.Radiohead, In Rainbows

4. Klaxons, Myths of the Near Future

5. Battles, Mirrored

6. Arcade Fire, Neon Bible

7. Arctic Monkeys, Favourite Worst Nightmare

8. Panda Bear, Person Pitch

9. Justice, Cross

10. Burial, Untrue

Every one of these is a record that deserves exploration; seven out of 10 are on independent labels, every single artist started out life on an independent – proof that great music is alive and well and living, on the margins and sometimes in the mainstream, on independent labels.

Now look at the 10 best sellers of the year:

1. Amy Winehouse, Back To Black

2. Leona Lewis, Spirit

3. Mika, Life in Cartoon Motion

4.Take That, Beautiful World

5. Westlife, Back Home

6. The Eagles, Long Road Out of Eden

7. Kaiser Chiefs, Yours Truly, Angry Mob

8. Arctic Monkeys, Favourite Worst Nightmare

9. Timbaland, Shock Value

10. Rihanna, Good Girl Gone Bad

Notice the difference?

Finally, the critics’ top tips for 2008:

1.Adele

2. Duffy

3. The Ting Tings

4. Glasvegas

5. Foals

6. Vampire Weekend

7. Joe Lean and the Jing Jang Jong

8. Black Kids

9. MGMT

10. Santogold

Wonder which half of the draw (if either) each of those will have fallen into in a year’s time...

One of the beauties of what we in the record business spend our lives doing is that each year there’s a new and different bunch of great artists and records, and whether you like what other people like, or what no one else likes, you can listen to and enjoy what comes along. The 30 or so artists above all merit attention; you’re bound to love some of them.

The future of the industry relies simply on the ability of those within it, directly and indirectly, to tempt you to do exactly that, and on the willingness of those in power to put new artists in front of you.

Martin Mills is the chairman of the Beggars Group of record labels