SXSW Music panel. Panelists: Justin Sinkovich, Richard Gottehrer, Chris Fagot, Ted Cohen
*[Official description](http://2008.sxsw.com/music/conference/panels_schedule/?action=show&id=MP060369): Digital retail is a growth market, and recent developments are encouraging for artists and labels alike. While rights management systems have not disappeared entirely, customers are embracing retailers’ DRM-free offerings. Distribution and aggregation are more streamlined. A base of paying customers is slowly building. How can digital retailers maintain this momentum?*
The traditional view from the music industry is that music should not be downloaded for free. One panelist even brought up the possibility of having an ‘iPod tax’ for usage, which I thought was ludicrous.
The panelists discussed another business model whereby all new singles are released at a very low price. As more people download it, the price increases until it reaches a saturation point, which then determines the worth of that single. It is likened to a ‘stock market’ approach.
A survey’s conducted among us as to who paid for the Radiohead album that was released on a ‘pay as you wish’ model. As [previously blogged](http://vantan.org/archives/2007/11/radioheads_payw.php), I was one of those people so I raised my hand. He asked how many more downloaded it without paying, and I saw only one or two hands raised. It was heartening to know – but perhaps as musicians ourselves, we empathise more with Radiohead’s situation.
Radiohead’s model has taken away three common excuses from music fans who refuse to pay:
1. “I want to sample the music first, but have to pay to download a track, so I might as well download it elsewhere for free.” or “I’d pay for it but I don’t like DRM’s limitations.”
2. “I’d pay $8.99 for it, but it costs $9.99 so I’m going elsewhere to download it for free.”
3. “The music companies are the ones making the money and not passing it on to the artistes, so why should I pay for it?” I never thought this argument worked because artistes do get a cut, even if it isn’t very much.
Gotthehrer feels artistes today are still bound by traditional rules in the midst of new developments. In the good ol’ days you’d just go to a record store and buy something. iTunes has changed it all. Artistes need to ‘go with the flow’. Don’t think of themselves as ‘indie’ just because they’re not with the big labels. “We’re all musicians.” ‘Digital’ makes it possible for everyone to get their music out there. Lastly, he feels musicians should be in it not just for the money but for the love of making music. This draws wide applause from the audience.
The panelists feel that marketing is necessary for artistes. However there’s a limited amount of space. iTunes is pretty reasonable for getting indie music, with their Staff Picks, but there are only so many boxes that they can display.
During the panel discussion, there is occasional talk of ‘changing the law’ and ‘going to Washington’, but surely it isn’t that easy or realistic a solution.
[Net neutrality](http://en.wikipedia.org/wiki/Network_neutrality) was touched on briefly.
Cohen describes how he’s surprised at the younger generation (i.e. his son) downloading stuff. His son’s justification: “It’s so easy, it doesn’t feel illegal.” Cohen jokes that “a few public executions may help”. I sense the digital divide in attitudes here…
Member of the audience says, “Value is in the eye of the beholder.” Some may value keeping CDs but others see him as “antiquated”!
The panelists seem to refer the most to iTunes and have accepted that this is the biggest player in the digital music market. “If iTunes switched to a subscription model, people would forget about Rhapsody.”
Cohen extends the scope of this subject to other digital content such as books, saying how he met someone who downloads thousands of digital books.
Gottehrer has a more progressive view – the digital world gives artistes great opportunities to get their music out – “don’t be mistaken about it”. Sinkovich too is “excited” about how things are going.
In summary, some interesting issues were brought up at this panel, but of course this is too big and complex an issue to conclude anything significant. Trends to look out for: new devices, faster broadband and phone networks like 4G – these may create more opportunities to download digital music.
I’ll take my hat off to anyone who can distribute all artistes’ music equally, and fairly compensate all parties involved, thereby eliminating the need for illegal downloads. Much, much easier said than done.