Doom-and-gloomers got some reaffirmation from mother nature this week
in New York. At the Digital Music Forum in Tribeca, spoiled
Californians had more than rain to contend with, as February in
Manhattan delivered a wintry mix of slushy snow, wind, and limited visibility. Even the symbolic Statue of
Liberty, just across the Hudson from the hosting Museum of Jewish
Heritage, was barely visible.
The backdrop was more than fitting. Attendance was only modest, thanks to continued budget-slashing across the sector (and beyond), and continued skittishness amongst firms and investors. This is hardly the fault of the Forum; even Midem suffered high-profile absences from the likes of Universal Music Group and others.
And make no mistake, money is an issue. Some Forum attendees expressed displeasure with a near-$1,000 entrance fee, hardly the type of chatter found in frothier times.
But more importantly, the mood was simply subdued this time around. There was nothing sullen about this audience; instead, lots of longtime veterans were calmly chatting business and greeting familiar faces. The excitement of disruption is wearing a bit thin, and if 2009 was the time for overcompensation and 'rah-rah' talking points, 2010 is when a bit of tired realism has finally settled.
Perhaps NPD Group analyst Russ Crupnick started the party wrong. In a research-focused opener, Crupnick poured through slides showing decreases in music-related purchasing, declines in paid downloading, and increasingly-alienated demographics. In just two years, the industry shed 24 million buyers in the US (a 21 percent decline), and the number of paying downloaders edged downward to 34.6 million last year. That afternoon, Apple reached its ten-billionth song download, though somehow, the number was hardly mentioned the next day.
On the bright side, Crupnick pointed
to significant decreases in P2P file-trading. But for the most part,
users are not steering towards premium. Instead, they are substituting
towards hotspots like MySpace Music and Pandora, or worse, sharing
massive external hard drives with one another (dubbed 'sneakernet' at
one point in time). "Sometimes, more listening is just more listening,"
Crupnick relayed, pointing to the moneyless victory of
on-demand, ad-supported streaming.
The presentation was a bit deflating, especially coming from NPD, typically an industry cheerleader. But others offered more optimistic takes. Sony Music Entertainment executive Thomas Hesse expressed a more blue-sky forecast for digital formats, though the mildly-convincing case was tempered by the dry wit of interviewer Larry Kenswil (now at Loeb & Loeb).
The next day, Rio Caraeff was busy selling the successes of Vevo, though some of the stats were too good to be true. Caraeff claimed the throne of the biggest music entertainment service, with monthly uniques hitting 35.9 million in the US alone (6.8 million in Canada). But most of the views - 90 percent - are happening through YouTube, and the advertising component is still a tough sell. Caraeff told Digital Music News that Vevo was now seeking CPMs 'north of $20,' though the specifics on actual valuations ended there. Earlier, sources pointed to a targeted CPM range of between $25 and $40.
Perhaps the highlight came from an unusual source. At
the nearby LimeWire headquarters in SoHo, a healthy and upbeat crowd
enjoyed brews, hors d'oeuvres and live music after the
conference. Throughout the week, LimeWire CEO George Searle was
weathering backlash, but at the shindig, Searle was soaking in a relaxed
and non-controversial vibe.
There was even a view, of sorts. Outside the oversized windows of the LimeWire loft, an abstract illustration decorated the side of a nearby building. The huge white-on-black resembled a chalkboard, with a manic artist scribbling about.
The LimeWire model of converting wildly-free to sometimes-paid seems equally scattershot. At the conference, Searle hoisted LimeWire as a place where music fans congregate, where the energy is actually happening. "We like to bring music to where fans actually are," Searle said. But whether freebie fans are willing to migrate en masse to the Limewire Store remains speculative, and so far, just another abstract version of freemium.
Report by publisher Paul Resnikoff in New York.
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