Head of the Australian Recording Industry on the New Music Business

Head of Australian Recording Industry on the New Music Business

Posted on 23. Sep, 2009 by refe in MUSIC INDUSTRY

ARIA Chairman Ed St. John

The new music industry could be effectively broken down into two different camps, with the traditional recording industry on one side and the proponents of the emerging independent DIY models on the other. The two camps rarely see eye to eye, but in many ways the debate between them is quite balanced. The traditional recording industry has all of the money and political clout, while the independents have the blogosphere and a compelling David vs. Goliath story.

It’s no secret which side of the fence I’m on. I write primarily to independent musicians and those who are building their careers around them. And while I try to focus more on highlighting innovation and finding solutions, I’ve certainly done my fair share of major label criticism.

Today I want to point to an interesting interview conducted by Andrew McMillen on the OneMovementWord.com blog. Andrew has contributed to Creative Deconstruction in the past, and when he sent me this interview I realized that it provides a great opportunity to present a different perspective on the changing music industry.

The subject is Ed St. John, head of the Australian Recording Industry Association (the RIAA of the land down under.) This guy’s basically in charge of the traditional recording industry for the continent. The interview is an interesting change of pace because Andrew is actually quite sympathetic toward St. John and the recording industry in general.

St. John spends the bulk of the interview defending the recording industry against its critics. ”I’m all for discussing issues in a productive way, in a positive way,” he says. ”I love talking about new ideas, new business models, new ways of marketing music. But I just think you have to steer clear of people who are in the business of criticising major record labels for their own gain.”

Of course, the same warning could be given against those who are in the business of defending the major record labels for their own gain, but the point is valid and well taken. It’s good to see the man at the top getting excited about innovation.

St. John also addresses the growing chorus of voices online speaking out against the major label system. “Everyone is entitled to say whatever the hell they like, which is fine, of course.” He goes on, “But I don’t think many people really understand what record companies do; they’re very quick to judge the way the business works, or the way it has worked, without really understanding it.”

I agree that the democratic nature of the internet is both a blessing and a curse. With such a low threshold of entry there are of course many speaking up online who just don’t have all the facts. These are in many cases some of the loudest voices. However, there are also many bloggers and commentators who do have quite a bit of knowledge of the music industry. These individuals provide an important service as they represent an alternative to the established system.

Toward the end of the interview St. John gives what I found to be his most compelling defense of his industry. It’s a bit long, but well worth a read:

I think there has been a lot of demonisation of the music industry in general, and major record labels in particular. It’s sort of easy to do. It’s like saying the big Hollywood studios are evil. It’s an easy position to take, because you don’t really have to explain how they’re evil. It’s generalised evil, but if you actually break it down; if anyone bothered to come look at the people that work at a record label, and the work they actually do, they’d realize that there is actually a group of quite dedicated people trying to make their artists successful, which is pretty much the same as in a lot of other businesses. It’s not like we’re sitting here plotting how to destroy the world, or anything.

A lot of things have changed in the last few years. We, like any business, need to accommodate those changes in consumer behavior and the way that people share, experience and discover music. It’s quite easy to set up an illegal business model that is based around stealing someone else’s property. It’s quite a lot harder to run a legitimate business, and our challenge is that we run a legal, legitimate business. We have actual agreements with artists that we can’t just change on a whim.

If we want to do something new, we often need to get the artist’s consent. Call us old-fashioned, but we have a business that’s based around observing people’s rights and paying people royalties.

When circumstances change in the way people experience music and interact with it, it’s our job to understand that and respond to it. It’s not as if we’re pretending it hasn’t changed, because obviously it has. Our challenge is to evolve with these different media whilst still running a legitimate business, adhering to those contracts, and paying our artists.

It’s quite challenging to evolve quickly in a rapidly changing market. The music industry today is a very different beast to what it was 10 years ago. There has been a huge shift in focus. I think we all understand how much has changed. We’re just learning to have a different role and provide a different range of services for our artists, and a different offer for a consumer that fits the way people experience music now. That’s obviously a constantly moving target. It evolves all the time.

That last paragraph is an important one. The recording industry is steering a big ship with a small rudder. They don’t have the agility of independent artists and the teams that support them. That’s not necessarily a defense – if your organization isn’t scaled to meet the needs of the business then it needs to adapt. It is valuable, however, to understand the challenges they have and that they are actively looking for ways to meet them.

Now if only we could find away to bring the traditional industry and the independents together to attack the issues they both face with a united front… Unfortunately that doesn’t seem too likely, at least not for now.

Read the entire interview at OneMovementWord.com.

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Tags: ARIA, business models, music, record labels

11 Responses to “Head of Australian Recording Industry on the New Music Business”

Marcus Dunlop

23. Sep, 2009

“We, like any business, need to accommodate those changes in consumer behavior and the way that people share, experience and discover music.”

glad to see someone in this position talking about sharing in a realistic way.

simple article, yet great. congrats.
Tweets that mention Head of the Australian Recording Industry on the New Music Business | creative deconstruction -- Topsy.com

23. Sep, 2009

[...] This post was mentioned on Twitter by Sebastiano Mereu. Sebastiano Mereu said: Head of Australian Recording Industry offers a different point of view on the new #music business http://bit.ly/S6QGH via @refeup [...]
Andrew McMillen

23. Sep, 2009

So great to get your perspective on St John’s words, Refe. Thanks!
- refe
  
  23. Sep, 2009
  
  Thanks for giving me something worth talking about!
Andrew McMillen

23. Sep, 2009

Refe,

Thought you might dig this reply from Ed when I showed him your commentary.

“Bloody hell Andrew, what have we done? I’m attracting positive and sympathetic feedback from the blogosphere. Where will this madness end?

It’s nice to see a more measured perspective. We’re actually not evil …. we’re just cursed with being the incumbents in a rapidly changing world.

Cheers

Ed”
Rich Huxley

24. Sep, 2009

Great article as ever CD, however I’ve got to chip in on a few things:
1 – “demonisation of the music industry (is) sort of easy to do… It’s an easy position to take, because you don’t really have to explain how they’re evil. It’s generalised evil…”
While this generalised evil theory has some weight, it’s fairly easy to break down
- 80/20 splits or worse in favour of the label
- signing artists and not releasing their works, or promoting them
- short term success seeking = long terms failure (the main reason that the record business is failing for me – have a look at Malcolm Gladwell’s talk at AIGA – http://www.aiga.org/content.cfm/video-gain-2008-gladwell)

I won’t go on, I’ve made it clear which side of the fence I’m on. I for one would be keen to see integration between old “industry” and new music strategies with independents, however it’s further complicated by the relatively closed shops (in the UK at least) of radio and TV.

I for one am looking forward to hearing the outcomes of today’s debate in London about file-sharing. Please feel free to share my files wherever you want by the way:
http://www.hopeandsocial.wordpress.com/about
Studio Manifesto | Head of Australian Recording Industry on the New Music Business | Studio Manifesto

28. Sep, 2009

[...] from Creative Deconstruction [...]
James Pew

28. Sep, 2009

Great post refe. I reblogged on Studio Manifesto, along with my comment below. Sorry for the length.

1) “Often the people criticizing do not have a full understanding of the inner workings of big conglomerate music companies.” – Although this may be true, do you really need to be an expert on how record companies operate to know that their models have more often than not exploited artists and taken unfair portions of revenues? Do you need to be an expert on power generation to know that coal burning power plants are an out moded technology that pollute and should be replaced with innovative non-polluting sustainable technologies?

2) “if anyone bothered to come look at the people that work at a record label, and the work they actually do, they’d realize that there is actually a group of quite dedicated people trying to make their artists successful.” – This is a classic argument that is used by every corporate PR person, from virtually any business where corporate tyranny exists. Its never the people working for the firm…its the corporation itself when you view its activity in totality.

Get my full reaction at http://www.studiomanifesto.ca
- refe
  
  28. Sep, 2009
  
  Mr. Pew if you would like to leave a novel in the comments here you are welcome to do so.
  
  I was hoping this would spark a little debate! You and Rich both bring up good points. And, of course the CEO of Warner Australia and the Chairman of ARIA is well-versed in the art of PR.
  
  It would be interesting to bring up the often unfair agreements they offer artists in conversation. In a section of the original interview that I didn’t reprint St. John says this:
  
  “That relationship between the fan and the music is absolutely sacred, and it’s what drives our entire business at every level.”
  
  “The job of the industry is to facilitate that relationship and make it enjoyable, seamless, and rewarding for everybody involved, and to not get in the way of that process any more than we have to. And as much as possible, to add value.”
  
  The question that I would ask him is this: how do you reconcile that statement with the way artists are so often treated by the major record labels?
  
  Ultimately, intentions don’t mean much unless they produce action. It’s still encouraging to hear someone in his position articulate these things.
  - Rich Huxley
    
    29. Sep, 2009
    
    Absolutely – I love his enthusiasm, however as regards:
    “That relationship between the fan and the music is absolutely sacred, and it’s what drives our entire business at every level.” it’s now got to be so much more than the relationship between the fan and the music. What arguably drives the consumer now is the relationship between the fan and the artist. In many cases, the label only serves to distance one from the other an add another layer between fan and music/musicmaker.
    
    It has to be Your relationship with fans, not your label’s. Ask Imogen Heap.
    xR
    http://www.thehuxcapacitor.wordpress.com
James Pew

29. Sep, 2009

If only major labels could take this type of PR (read: propaganda), and make it consistent with their actions. They will have no choice, I think, going forward. I am hopeful that some people working for majors will. Only time will tell.