Monetising music

(© Sherri Camp/Dreamstime)

NOTHING worries independent recording artist Jerome Kugan more than the fact that there is a generation of music lovers who have never paid for music.

“Lots of these kids love music and they download a lot of stuff. One day I casually asked one of them, ‘What was the last CD you bought?’ The guy, who was about 18, said he’d never bought a single CD in his life.

“He wasn’t the exception. He was more of the rule. So you have this upcoming generation who has never learnt to pay for music, and that scares me,” Kugan tells The Nut Graph.

The internet has long distressed the music industry because it challenges the traditional business model for recorded music. Its mass file-sharing ability has supplied listeners with a library of music at barely any cost. At the same time, the internet also empowers musicians, including those sidelined by traditional media, to self-promote and reach a targeted audience for free.

When Kugan released his debut album Songs for a Shadow, a large portion of his publicity campaign was rooted online. Apart from engaging NTV7’s Breakfast Show and several print publications, he also blogged about his album and lyrics, and set up a fan page on social networking site Facebook.

Kugan (Courtesy of Jerome Kugan) Apart from the 1,000 copies of Kugan’s CDs that are distributed at local record stores and events, his music is also exclusively available on Popfolio.net, an online social network that enables visitors to listen to music for free, or buy the album along with its artwork.

Producer and founder of Popfolio.net, Hardesh Singh, says the site creates tools to help musicians distribute their music through its online mp3 store. Music lovers can buy prepaid cards to download music from the site.

Popfolio also created a music-streaming widget called Poptopus, which is an ad-supported web application that enables artists, website hosts and advertisers to share music and generate income whenever a user plays a song.

“All that sharing and trading is worth a lot in terms of marketing potential. Music is free, but the mass sharing of music online is a huge area open for [business] exploitation,” Hardesh explains.

Stiffer competition

Indeed, there are new opportunities for musicians because the internet creates access to an online audience.

For example, singer-songwriter Zee Avi (formerly known as Koko Kaina) had only performed for a live audience twice when she told Kakiseni.com that she had been signed by music label Brushfire Records, which belongs to American folk singer Jack Johnson.

Democratisation of online music means greater competition
between independent artists and those managed by
established music labels, says TeoKoko Kaina began by performing her acoustic songs on a web camera from her bedroom. After she uploaded her performances on video-sharing site YouTube.com, she was suddenly catapulted to success.

“I never would’ve thought that it would come this far in this big ocean of videos,” she wrote on her YouTube site.

However, there are also challenges because of the internet.

Pete Teo says competition is already stiff between independent musicians and their peers who are managed by established music labels. But with the democratisation of music on the internet, there is even greater competition as listeners are offered more choices, the singer-songwriter says.

“For a listener to get a hold of you, it becomes a one-in-a-million chance. I mean, that’s worse than the lottery,” he says.

Indeed, the road to sustained musical success will continue to be long and hard for Malaysian musicians.

Although musicians seldom profit from CD sales alone, Kugan says, they are nevertheless worried. Before, music labels profited from physical CD sales; with free downloads today, labels have little control over their commodity.

“They can’t tell control it anymore, they can’t control where the music is going, who owns and consumes the music. They tried to do something, like that incident [of shutting down] Napster. But peer-to-peer platforms are sprouting like mushrooms — shut one down and 10 will appear,” Kugan says.

Join them

Even though music labels have stopped suing consumers and distributors, and shutting down peer-to-peer file-sharing platforms to curb piracy, music labels and musicians are still engaged in an ongoing debate about how to engage the internet.

“The internet is a free domain. It’s an opportunity-filled territory for anyone who knows how to manipulate technology. So, if you can’t beat them, you have to join them. Labels need to surrender to them and see how they can work together,” Kugan says.

(© Willecole/Dreamstime)Still, questions remain. Should the music community retain status quo and impose digital rights technology on recorded music? Or should they clamp down on piracy? Or capitalise on an internet music distribution model?

The Recording Industry Association of Malaysia (RIM), an association of both global and local labels, has been a part of a crusade against piracy. According to RIM press releases dating back to 2006, the organisation has sued property owners who rent their premises to pirated disk vendors and pasar malam kiosks that hawk ringtones.

But there are other players — like Media Prima’s subsidiary Gua Music — who are trying to monetise on the digital music paradigm. Established in early April 2008, Gua is a Malaysian music portal that allows consumers to download digital-formatted music at a fee of up to RM5 per song.

Its general manager of content, brand and marketing, M Zulkifli, said Gua Music has a unique selling proposition because it is a convenient, one-stop shop for CD-quality Malaysian songs.

“An online store is so much more convenient for people. There’s already a market of people listening to music on digital devices. Of course they can rips CDs, but it’s all about choices,” he says in a phone interview.

Nevertheless, music on Gua is copyright-protected with Digital Rights Management (DRM) technology. This ensures that each song can only be burnt onto a CD or uploaded to a digital-music-playing device up to three times, Zulkifli explains.

Not selling music

Revenue from the downloads are shared between Gua Music and independent artists or music labels. But Zulkilfli says online music portals like Gua Music aren’t just another revenue stream. Several musicians like Malaysian hip-hop and rap group Teh Tarik Crew and Malay folk rock musician Pacai use Gua Music to publicise their music.

Hardsh (right): Regardless of the trends in online music, artists
can’t afford to bypass music labelsAnd the truth is, getting listeners to pay for music is getting harder, even though the music industry is continually encouraging people do to so. Invoking the goodwill of listeners and getting them to set aside money for music when it’s available for free is like asking someone to take the stairs when there’s a functioning elevator.

“File sharing is here to stay because the internet is, by design, a file-sharing network. That kids can now trade music files is not the fault of the network, nor the fault of the people who run or use the network. They are merely doing what technology has enabled them to do,” Hardesh says.

But perhaps the digitalisation of music will be the catalyst that results in musicians earning more than when they were previously in an uneven business relationship with music labels.

Teo says both labels and artists need to face the fact that they are no longer selling music. Instead, they’re selling the musicians’ personal brand identity. Revenue will come from endorsement deals and live show sales after an artist becomes popular.

Kugan and Teo believe that while recorded music continues to be a source of income, it will perhaps evolve into a vehicle to promote live performances instead. Teo observes that the selling point of these performances is that they are not replicable.

“You’re flipping the coin. Basically, recorded music becomes a promotion for something else,” he says.

(© Paul Fleet/Dreamstime)

But while musicians are better able to market themselves on the internet, Hardesh says they still can’t afford to bypass music labels. Musicians are still better able to reach a broader fan base by using both traditional and new media.

He says: “Of the hundreds and thousands of bands out there on Myspace, only one or two will be lucky enough and get recognised or signed on to a label. The fact is, while the major labels are losing out on the distribution front, they are still the only ones with the experience and resources to market artists.”