The Stool Pigeon music newspaper

British Phonographic Institute chief executive Geoff Taylor has insisted that the future is still rosy for record labels, despite the much-publicised moves by many established artists to take their music away from conventional deals.

Writing in The Daily Telegraph, Taylor makes the very valid point that singing deals with major live promoters (Madonna and Live Nation), or giving away music online (Radiohead, The Charlatans), or as part of a newspaper cover mount (Prince), was only an option for artists with an existing fanbase developed “after years of marketing and investment by record labels”.

Taylor cited the Arctic Monkeys and Lily Allen as two artists who had combined the financial and marketing clout of their record labels with a grass-roots promotion via MySpace. “Record labels are changing but remain the most highly skilled at identifying, investing in, nurturing, marketing and promoting new musical talent,” Taylor insists. “Technology provides new ways to promote artists, but does not replace record labels.”

Interestingly, Taylor seems to compare music CD giveaways with illegal filesharing, saying both are responsible for devaluing music as a commodity. “Generating sales through marketing is an uphill battle when your product is available for free in the shop next door, legally or not,” he writes. “Giveaways are symptomatic of how copyright theft has devalued the commercial value of recordings, which has a knock-on effect for everyone in music, as recordings still form the basis for most artist investment, which then helps to drive other sectors of the business.”

One wonders whether he feels that the power of Tesco and the other supermarkets in offering a limited range of massively discounted CDs is part of the problem. A report published just days before Taylor’s article suggested that iTunes practice of dismembering albums into individual tracks, along with supermarket pricing policies, was more financially damaging to the music industry than piracy. The Capgemini for the Value Recognition Strategy Group report estimates that of £480 million lost to the industry since 2004, only 18 per cent was the result of piracy, while £368 million was the fault of format changes and discounting.

Will Page of the MCPS/PRS Alliance points out that the success of legal downloading through iTunes has made Apple a lot of money that hasn’t filtered down to artists and record labels. He calls this a “broken supply chain”. In his article, the BPI chief insists that “the challenge for the industry is to turn more of the growing number of streams, copies and downloads into pounds and pence.”

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