Column from October 4th, 1999 issue
Been reading a very interesting presentation this week from a guy called George Geis whose an information systems professor at the University of California, Los Angeles.
The main thrust of what Geis is saying is that the arrival of digital music delivery may do for the recording industry what rock and roll did in the 1950s: empower a new generation of independent producers and break up the global oligopoly of the major labels. That would be good for all forms of music, melodic rock included, and get the power in this industry away from the people that know nothing about music!
Geis also added that internet delivery could expand the market for music into new applications and "liberate a $100 billion dollar industry trapped inside a $40 billion body".
All the major labels are running about embracing internet delivery methods, but in truth theyre shit scared of it! Geis confirms that point by saying that the establishment of a direct link between artist and consumer could many redundant many of todays vertically integrated music groups. Manufacturing, shipping, group management and even marketing could "fall out of the industrys established value chain" and even retailers could be threatened too.
After a long, slow regrouping the "big five" (Universal, EMI, BMG, Warner and Sony) account for 80% of album sales, but they need a good shake-up. Now theyre all saying how much they are going to support internet delivery, but Universals shares fell the best part of 10% in a couple of days due to fears its growth would be slowed by heavy internet-related costs. That shows just how short term the music industry has become, and the major labels must stick to their guns rather than being led around by rings in their noses by accountants.
Sony is one thats been quick to embrace internet delivery and has planned to make 4,000 albums available for download on demand in US shops. Such a system has already been tested at the Virgin Megastore in Columbus, Ohio and is due to introduced in Los Angeles and New York "in time for Christmas". Gies says this is a sign of the times though "whether it succeeded was irrelevant, but the initiative shows how the big five are bending over backwards to keep retailers in the value chain". What hes saying politely is theyre trying to find a way to appear internet delivery while still lining as many pockets as possible ..