Sara Kelly is your eyes, ears and voice in Brussels and Westminster. Every fortnight she brings you the latest insights on policy changes, legislation and lobbying.
I don’t know much about music. Most of my music taste is stuck in about 2004 when I fell in love with a danish indie band and began regularly listening to a danish radio station I streamed online, desperate for more danish indie electronica (inditronica) music.
The radio station doesn’t exist anymore. Now if I want to find music that caters to my particular taste for nordic inditronica music, I have to do a bit of search around music blogs (too time consuming), rely on “Similar to this track” services (rarely serves up nordic music), find playlists (which don’t often get updated) or just plain word of mouth.
What I need is a music service dedicated to streaming nordic music in the UK, with a suggestion service that delivers similar nordic music so I can find new bands I’ll probably like, and hurling me into the current decade musically speaking.
Streaming music
I’m sure it’s not just me. I imagine there are people out there who would like to listen to Japanese J-pop, or french Rap, or any other kind of genre of music that has a niche audience willing to pay for services that are reasonably priced, that function effectively, and deliver them the content they want.
Or even services that stray from £9.99 per month all access subscription service. We have a couple trying them, Psonar and Bloom.fm who offer pay per play and unique subscription levels respectively. But given the demand and the infinite possibilities for niche markets we should be seeing a lot more businesses trying out new things with music. For example, Mark Mulligan who writes the Music Industry Blog recently proposed the idea of a single artist subscription service.
Who is going to build these services? Surely the startup industry who’re disrupting huge industries like bank transfers, transport sharing, and even funding startups. They’re the ones trying to do new things, finding new markets and building consumer focussed products to do that.
If you attend any of the ideas sessions at event like Startup Weekend, like the one taking place in London next week with a focus on the Creative Industries, you start to see a pattern. Somebody comes up with an idea around a content platform designed at targeting a niche market, like a nordic music streaming platform (Somebody? Anybody?), then quickly the conversation turns to licensing and the enthusiasm in the team quickly evaporates and the group moves on to looking at ways they can innovate around existing providers.
Music or any type of startup needs to operate in a legal framework
That’s why we’ve seen a wealth of startups built upon using YouTube, iTunes, Spotify or other big market players data. Looking at a list of UK music startups there are very few that are looking at delivering content. When you speak to founders working in this space you quickly hear how much product and business design is being influenced by the need to avoid what is seen as impossible-to-finance licensing costs.
Music or any type of startup needs to operate in a legal framework. Not only if they’re to conduct business in the UK but if they’re also to receive any investment. So by having that being unable to licence content we’re missing out on a whole load of new businesses
This isn’t just bad for creative entrepreneurs trying to build new businesses. It’s bad for consumers. They want different and new ways of finding and listening to music, and at competitive prices. It’s bad for artists, who don’t even know why their content isn’t being licensed on a particular platform, and can be misinformed about the arrangements even when they are, as seen with the recent Pink Floyd/Pandora debacle in the US.
Even if entrepreneurs get over the initial hurdle and decide to enter into the ring and go for licensing, they’re side swiped with the realisation that, firstly, music startups must license the same content from a number of different organisations. Secondly, the ‘negotiations’ are more like a series of demands, where the licensors feel able to take as long as they like, and determine how much content you’ll seek, the technical requirements for your product, your price levels, and many other elements fundamental to your business model. Somes influenced by whether the licensor has interests, vested or otherwise, in a competitor.
This isn’t just a problem with music startups of course. Similar problems can be seen with audio visual, ebooks and other creative industries that require licensing of copyrighted content.
Does IP harm innovation?
There have been a number of efforts in the UK in recent years to look at how the copyright and intellectual property regime helps or hinders innovation. Professor Hargreaves in his independent review made ten recommendations, which were accepted by the Government, and they’re now seeking to implement them. In the EU right now the Commission are putting together a Directive on Collective Rights Management (the licensors of content). As a follow up to Hargreaves, Richard Hooper is looking into developing the ‘Digital Copyright Exchange‘, which is looking to establish a database of “who licences what”, and facilitate the high volume low cost type licensing that is currently missing from the market.
But the Hargreaves review is now three years old and into its fourth round of consultations. The EU efforts only deal with part of the licensing puzzle. And the Digital Copyright Exchange has seen little movement since Richard Hooper published his recommendations almost a year ago.
Entrepreneurs are coming up with great ideas all the time that will provide better platforms, different content and new services, but are being stopped, either at the idea stage or not far past it.
Maybe one day I can have my nordic inditronica streaming service, but not while the licensing process remains an impassable impasse for the many.
If you’re somebody who is currently working on a music startup, has an idea for a music startup you’re too scared to reveal publicly, or tried and failed at a music startup, and wants to share their experiences confidentially to better inform discussions on how licensing works in future, please contact me at info@coadec.com.
(If any readers also happen to be fans of nordic inditronica music do check out the Ja Ja Ja festival, taking place in November)
image credit: flickr/reallyboring