U.k. Report Says Pop/politics Bond Key To An Online Future

LONDON-Wide-ranging action is required before the British music industry can take advantage of the Internet as a user-friendly tool that drives sales, according to a new report from the Institute for Public Policy Research (IPPR), a U.K. think tank.
According to the IPPR report, titled "New Musical Entrepreneurs," new initiatives in education and improving interaction between the business and government are key to building the industry's future. IPPR, which describes itself as a left-of-center think tank, is privately funded via charitable donations.
Reflecting the U.K. music industry's higher profile with government than in the past, Janet Anderson-parliamentary undersecretary at the U.K.'s Department of Culture, Media, and Sport (DCMS)-says the government is willing to help in this process because it recognizes the music business as one of the U.K.'s "biggest and most culturally significant creative industries."
She adds, "The development of new technologies provides huge potential for growth in the music industry-and it is this potential that we want to help realize."
Indeed, the governments of the U.K. have adopted such a proactive stance that Paul Brindley, the author of the IPPR report, is now a member of a DCMS subcommittee, which is due to release its own report, "The Music Industry And The New Technologies," next month.
In his study, Brindley outlines three new models for the future of music distribution: physical product ordered electronically and delivered via mail order; digital audio file ordered and delivered electronically and stored by the end user; and digital audio stream delivered electronically at the request of the end user but with no permanent, stored copy. The report says, "All three models offer the consumer considerable benefits over the traditional distribution models."
Those traditional models may be effective, but over the past five years, the British music industry has seen a decline in overseas earnings. According to the report, figures from the National Music Council and accounting firm KPMG show that in 1995, those earnings were 318 million pounds ($508 million); by 1998 the figures had slumped to just 208 million pounds ($333 million).
At the same time, Internet piracy has exploded. Last year the British Phonographic Industry (BPI) battled to close an average of 12 illegal Web sites per month. Currently it is closing 12 every week, and that is a drop in the ocean compared with the number of new sites debuting literally every minute of every day. Anderson notes that "revenue from E-commerce is expected to exceed 10 billion pounds [$16 billion] next year, 300% higher than predictions for this year."
She adds, "Other creative industries are watching developments in the music industry with keen interest, as they know their industries will face the same challenges and opportunities a year or two later. Music also has a central role to play in contributing toward the government's bigger goal of embracing the knowledge economy."
Welcoming the government's enthusiasm for greater collaboration with the music industry, Brindley notes, "The industry has not been particularly effective in coming together on issues, and perhaps in such circumstances the government could step in to mediate."
Unwilling to be drawn on specific topics, Brindley agreed that intervention could help in issues such as the controversy over the U.K.'s Mechanical Copyright Protection Society (MCPS) decision to set the rate for downloading music at 10 pence (16 cents) for each five minutes, plus 2 pence (3.6 cents) for each additional minute-twice the equivalent rate set in the U.S. (Billboard, Oct. 16).
Keen to emphasize the upside of his work, Brindley says, "Provided the industry and government move quickly enough to adapt to the demands of the new environment, new technologies present the best opportunity in years to open up the industry to new entrants and new markets."
Brindley, who is also bass player for alternative pop/rockers the Sundays, interviewed more than 50 key music industry players to compile the study. He's convinced the industry can harness the phenomenal marketing device that is the Internet if executives set aside company infighting and develop stronger relationships with legislators.
One of Brindley's main conclusions is that education, on all levels, is a must. Internet users are often "oblivious to the fact they are breaking the law" when accessing certain downloads, he says. One solution to the piracy problem is to teach children the value of copyright.
Explains Brindley, "If a few of the main copyright-based organizations could sit down and work out what they wanted to do, someone could quickly put together a CD-ROM package for use in schools as an educational tool."
Another concept championed in the report is the establishment of a pan-industry body to present a more unified stance to government and the media and give a voice to the U.K.'s smaller music labels.
Brindley also suggests the formation of an online resource to provide unsigned writers and artists with advice and information about the importance of rights and contractual issues in both the online and the offline environment. In addition, he urges the music industry as a whole to set up a one-stop online shop for all music licensing and rights clearance.
At the end of the day, Brindley is philosophical about his work. "At the very least it has galvanized a bit more reaction and prompted debate," he says.
"It's also helped to dispel the idea that government does not have any role in the music industry," he adds. "I don't think anyone can argue with the report's recommendations, but the sense of urgency is paramount; I wouldn't like to see these concepts being bogged down too long in committees."