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EMI Music CEO speaks out on digital music

16:40 | Friday November 21, 2008

EMI Music CEO Elio Leoni-Sceti has admitted that the record industry wasn’t fast enough to adapt to change in the digital music sphere, adding that paying for music seems to have become “almost voluntary” today.

Leoni-Sceti was speaking at Ofcom’s Next Generation – Net Generation conference, alongside such names as Telefonica Europe CEO Ronan Dunne and Google EMEA operations president Nikesh Arora, as part of a panel entitled Global Content Economy – Challenges For Business.

The EMI Music CEO questioned why, when content drives value, music sales have fallen by 20% over the last three years while at the same time broadband subscriptions have more than doubled.

“Partly because we didn’t adapt fast enough,” he answered. “And partly because we were one of the first content businesses to have to grapple with a business model that suddenly wasn’t a business model at all. Suddenly it became common for consumers - and businesses - to use our music without paying for it.

“Today, for every legitimate paid download, there are more than 19 that aren’t paid for. Think back to the value chain and consider who the beneficiaries are…

“Paying for music seems to have become almost voluntary, and its illegal consumption at times is considered ‘acceptable’. That’s a disturbing development in our society. Together with government - and under its lead - all parties must take a role in defending society against theft; just as all parties have done for hundreds of years in the physical world, and just as they do with fraud online or any other illegal activity.”

Leoni-Sceti acknowledged that content providers have “clear responsibilities” – notably to innovate and add value for consumers.

However, he argued that ISPs have their own set of responsibilities and are beginning to act on them.

“EMI supports the efforts by a growing number of governments to help the content industry work with ISPs to reduce illegal filesharing,” he said. “The UK government has initiated a process, led by OfCom, which should result in new codes of practice for ISPs, backed by legislation.”

He concluded by calling for a level playing field in Britain, to all “the best plumbers and the best poets [a term coined by Lord Carter, Minister for Communications, Technoloby and Broadcasting]” to aspire to “a sustainable and prosperous future”.

“This will ensure that Britain continues to be a world leading content - and not contentless - economy.”

Readers' comments

  • Daniel 22 November, 2008

    Major record companies need to stop trying to combat illegal filesharing! It is clearly a lost cause, instead of wasting more money fighting against a clear change of the perception of music and its value in society, they need to start figuring out ways to work alongside it. Find other ways of making a profit out of music!! Deal with it.

  • just 24 November, 2008

    While it is true that some need to add value to their work, unfortunately it's no certainty that this will be appreciated in the form of honesty. I remember the Reznor experiment with his recent album Ghosts where despite his limited edition vinyl selling out in hours, the majority of the most loyal chose the free download (9 tracks) as opposed to the small fee for a considerable gain (33 tracks). Curiosity probably won't kill the cat in many cases to come, as people will take what's free and leave what's not, especially as you can guarantee that when music is not free it still will be...

  • Dan Silk Pig 25 November, 2008

    Surly people must realise that some people must pay for the music or there will be no more NEW music available as record companies will stop giving bands a chance due to there being no market for it. Something needs to be done, a standard set that operates on a worldwide basis that gives all of the future Coldplays and Radioheads a chance.

  • Dean Chambers 25 November, 2008

    for better or for worse , Pandora's box was opened in the Mid-1980s with the advent of the compact disc ... the only "partial" solution that I see is to go to a system similar to that of the old film studios , where the artists would be recorded/promoted/managed by the record company ... recordings (vinyl , cassette , CD , whatever) would simply be a promotional device used to sell concert tickets , T-shirts , posters , and other merchandise ... artists would receive a salary against revenues generated by the sale of all products ... I'm sure that many individuals won't like the sound of this , but I see It as one of only a few possible solutions.

  • Danny Lee Ramsey 25 November, 2008

    I think the legal term is intellectual property,as it pertains to a musical work. That is Who's idea was this, who created this first, who brought this into the world. My question is, if society and governments agree that it is legal and right to just take someone's work... then what's next? How about we post chemical formulas for patented medicines? They could be manufactured on a ship in international waters or in "Joe's garage" and sold very cheaply. Screw the company that spent millions of dollars in development, screw the people who devoted a lifetime of study. How about trade manufacturing secrets? Why not post the secrets of turning ore into iron, melding plastics with ceramics,and so on? Screw the people who have programs to build a better mousetrap, if they are going to run research and development programs,great we'll rip them off just as soon as the test results can be bootlegged; and if they stop trying to come up with new and better inventions oh well we were due for a second "Dark Age" anyway! How about KFC'S secret blend of herbs and spices! Lets face it the government doe's not want to see musicians flourish. They are no longer on our side. At one time music was closely associated with church and state. Most great composers were supported by the wealthy heads of Europe and so on. They were fully aware of the power of a song binding people together, hypnotizing military parade marches and so on. But at some point the powers that be pulled away from music. The Russians will tell you that the Beatles were one of of the largest reasons for the fall of Communist ideas . Music is banned by the Taliban. We all know that the FBI and CIA and their agents these kept files on people like John Lennon, Bob Dylan,60s folk-singers and many immigrant composers. If we cannot make a living at what we do then we can not be professionals and our power base and numbers are greatly diminished. I wonder how many of our state and federal representatives that are watching our industry die remember in the role that James Brown played in stopping the riots and near race war when Martin Luther King was shot? Sorry but you can't tell me that "fileshareing" is right or moral. One of the most disrespectful things anyone can do to an individual is to steal a part of their soul, or a piece of their life's work, or a part of their livelihood. Their mothers did not raise them right. Sincerely Danny Lee Ramsey

  • Weston Boys 25 November, 2008

    Musicians and songwriters, of course, haven't really been making much money--seen in the long course of history--for very long. The past 30 years or so are an aberration. As a small label, I'm all for getting royalties and selling product. But really, perhaps one of the things EMI should have done long ago was to get into other revenue possibilities (merchandising, festivals, etc.). It's not all about the digital! --Matt at Weston Boys

  • Mark 25 November, 2008

    I love this guy! He asks us to consider the value chain - His industry should consider the value chain! What value is left for the record industry to add in a climate where anyone can now write, record, produce, and publish as well as create a website and sell or give away music direct - all from their own home??? The only pillar the record company has left to stand on right now is marketing power, and that is slowly crumbling for them with the advent of YouTube, Myspace, etc., which aides in the effectiveness of viral marketing. An unfortunate by-product of this all is that now that anyone can do this, anyone will, and there will be a lot of crap out there for the consumer to sift through... But I do not see this as unfortunate, as now the consumer has the power to determine what they want to listen to, not the record companies. String them all up I say!! they've been getting fat on someone else's blood and sweat for too long. I have no sympathy for someone who recognizes a revolution several years after it's begun. This clown is ignorant and should lose his job.

  • Graham 25 November, 2008

    Isn't the problem that young people don't have bank accounts to download legal purchases? As an older person who likes 70's music, I find that many sites legal sites don't have many hit singles, never mind one's that did not make the chart, during that period. For example I tried 5 sites for the Steve Gibbions Band Tulane. Not ONE had it! Is the record industry going to chase people on E-Bay who sell records (still in copywrite) for between £10 and £300, for the royalities? I think not.

  • Joey 26 November, 2008

    I agree that record companies need to adapt to the modern world but it's ironic that so many, and typically younger, 'freeloaders' feel entitled to take someone's intellectual property without paying for it when a more and more of them will derive their own future incomes from IP. Trust me, the vast majority of songwriters are struggling to make rent. Deal with that!

  • D. Gilbert Morgan 26 November, 2008

    Starving artists don't really starve. We are consumed by our affairs with Muses of inspiration and passion and artists are at peace being the penniless poop of free reign mooosic.

  • Sir Harry Cowell 26 November, 2008

    It is not in our nature to pay for something if we don't have to. So we have to make sure writers, musicians, singers, bands and all those people who provide the content, get paid for their stirling work. Let's be real here without these people, radio, TV, myspace, iTunes and even manufactures like Apple etc etc would not exist, as people only buy them / watch / listen because of the content...deal with that Daniel

  • Integrity 26 November, 2008

    Responding to Daniel's comment, it's not just the major labels who are trying to combat illegal filesharing. The struggle is also fought by those people whose works are being spread for free across the internet and other media without regard to the fact that the creative minds behind the work still need to earn a living. Those who knowingly steal music have no regard for those who have lost their jobs...those in the manufacturing plants, those who ship the CDs from the warehouse to the stores, the new songwriter who has only 10% of a song and needs every bit of revenue from that song to feed his/her family. And the list goes on and on. As Daniel so easily says that the majors need to stop fighting illegal filesharing, I can just as easily (and rightfully) say that the thieves need to stop stealing. It's just that simple. Deal with that.

  • FierceProStudios 26 November, 2008

    I run a production studio and in my opinion the illegal downloads is killing our industry. Back in the old days to produce a great quality album was very painstaking and extremely expensive. I respect all the big labels for that reason they have invested in every such aspect with very minimal return. Music should be "free to hear, not to own." This is my full time Job. I as well as the artist,producers,managers publishers and labels have the right to be compensated for all our hard work. When you choose to download the works rather than purchase them it is like theft. If we choose to give it away in forms of various mp3, ringtones, even full albums Mixtapes. How do we stand to gain profit for our investment? Demographic speaking I'm in the south you going to come to a show all the way to the south to see a performance? Most likely no, so if you don't purchase the products the labels put out you stop funding production. I think there is a solution. I impose that labels should use hex encryption on there products, therefor proving whats the original vs downloaded. All digital devices follow strict DPRM protection based upon this encryption therefor rendering the download useless unless paid for.

  • Linda C. 30 November, 2008

    How audacious of you to say we need to "deal with it." If you filled a basket full of groceries and walked out without paying, would you say the grocery store need to "deal with it?" If you filled your tank with gas and drove away, would you say the filling station owner needed to "deal with it?" And how about if I decided I wanted your couch or your car or your child? You either have integrity or you don't. You're either a thief or you're not. You get to make this choice every day. And every time you "fileshare," you are choosing to steal. There are many businesses that make obscene amounts of money but no one is distributing their products to the masses for free because of it. It's not the internet that has ruined the music business; it's the thieves that misuse it.

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21 November, 2008

 

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