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Brands for the Bands: is Copyright so Important for the Music Industry?

Posted on Aug 27, 2013 by Dr. Julie Nixon  | Tags: copyright, music, brands  | 0 Comments

Dr Julie Nixon

By Julie Nixon

Last week I attended the WS Society event “In Conversation with Cliff Fluet” in the lovely setting of the Pommery Bar. Cliff, formerly in-house counsel at Warner Music and now a Partner at Lewis Silkin, discussed disruptive technology in media and entertainment.  Digital innovation has radically changed the music industry, and new business models and new revenue streams have evolved as a result. One aspect of Cliff’s talk that was of particular interest was his comments that the value of a brand is becoming increasingly a lucrative intellectual property commodity in the music industry, with the value of copyright lessening.

Record Companies Lose Their Grip

Copyright laws were formed to reward innovation, that those who create works should be the ones who decide how their creations should be reproduced and made available to the public, and so benefit from any income generated. The traditional business model of the music industry was to obtain the artist’s copyright in the audio recording of a song, and the artist would receive royalties from sales of their music in a physical medium. Fast forward to today, where copyright in music has been attacked by piracy, music is obtained via digital downloads, and artists can promote and market themselves using services such as YouTube or other social media. Bands are seeing the value of providing their music for almost nothing in return for exposure and access to other revenue streams.

Artists Use Their “Heads”

Radiohead famously, once free of their record label, allowed fans to download the album “In Rainbows” for as much as they wanted to pay, a move that was hailed as madness. Instead Cliff informed us many fans paid handsomely for a download as a means of thanking and rewarding the artists. Some still willingly paid for the box set at £40, while meanwhile Radiohead didn’t have to share any profits with record labels or record stores. Those who chose to pay nothing to download the album from Radiohead's online shop were required to register their details and therefore become targets for future marketing campaigns. The album itself drove sales of tickets for the bands live tour.

A “Princely” Vision

Cliff regaled us with a story of how Prince, during his battle with Warner in the 90s told the record company there was “only one Prince”, showing visionary foresight as to how “brands” would become more important than the music itself. Today an artist like 50 Cent can make more money from endorsing Vitamin Water than releasing music. And live tours produce a substantial part of an artist’s income. The balance of power has shifted from the record companies to the artists themselves.

Recording artists no longer need labels to record, manufacture, distribute, or gain access to media outlets. The music industry attempts to still exert control by suing fans for copyright infringement, which some argue is an increasingly futile battle. Copyright, arguably, is only really of relevance to the highest-paid musicians and even they make most of their income from live performances.

End of an Era?

Is there any way back for the record companies? There is no doubt our copyright laws are increasingly out of step with the digital era, something the Digital Economy Act has tried to address.

However stronger copyright laws are not going to turn the clock back completely.   The power of the artist as a brand means that copyright is not the be-all-and-end-all that is used to be.    Record companies are already aware of this, hence the popularity of 360 deals where the record company seeks a share of income from sources other than just recorded music (including merchandise and touring).   So while copyright remains a key asset in the music industry it is clear that other rights are gaining greater importance.  

Julie

@_JulieNixon

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