Digital Music Forum Talks Pandora vs. Spotify, Artists’ Social Media Agendas

BATTERY PARK CITY, MANHATTAN – Last week, hundreds of music industry executives and entrepreneurs braved the snow and converged on the Museum of Jewish Heritage for the 10th annual Digital Music Forum: East.

The conference began with a research presentation by Russ Crupnick of The NPD Group. Crupnick started the conference with a bang, delivering the headline-driving statistic that online radio services such as Pandora boost digital download sales by 41 percent, while unlimited streaming services such as Spotify actually drive down sales by 13 percent.

The statistic was seen as bad news for the many who see Spotify as the industry’s golden boy, yet others responded that unlimited streaming services, by their nature, are not meant to drive record sales – that the advertising and subscription revenues replace record sales.

The State of the Digital Union panel only furthered Crupnick’s wariness of unlimited streaming services, with Kevin Bacon of AWAL (Artists Without a Label) saying that for his artists, Spotify is “nothing at all,” seeing little revenue boost from the unlimited streaming site and others like it.

Global Music Marketing panel consensus: social network your way to global exposure.

Barry Massarsky of Massarsky Consulting delivered more bleak statistics on the second day of the conference, sharing his findings that the price point for commercial radio licenses fell 20 percent in 2009, and predicting a 5 percent decrease in licensing revenue for 2010. On a more optimistic note, he predicted a 7 percent increase in licensing revenue for 2011 with the economy expected to turn around at that time.

The Digital Copyright Debate was one of the most anticipated panels of the conference, featuring LimeWire CEO George Searle and A2IM (American Association of Independent Music) President Rich Bengloff. Tensions were high between the two, as before the conference began Bengloff had issued a letter to A2IM’s members letting them know that he would not be attending the post-conference reception hosted by LimeWire “as it could appear to be seen as an endorsement of LimeWire by A2IM.”

After much frenetic back and forth between the panelists on the topic of illegal file sharing, moderator Jon Potter had the final word, saying that file sharing services such as LimeWire “offer users a Swiss army knife – some people are using it to cut steak and others are stabbing creators.”

Other topics discussed included lack of compensation for master rights holders on terrestrial radio, which Bengloff called “a tragedy,” as well as what the government’s role should be in illegal file sharing – Searle said that attempting to legislate against file sharers is less of a cat and mouse game and more of a “turtle and mouse game,” that technology evolves too fast for legislation to be passed regulating its use.

The afternoon saw such panels as Global Music Marketing, Music in the Cloud, Social Networks & Music among others, as well as a keynote address from Rio Caraeff of Vevo. Caraeff used his keynote address to announce Vevo’s plans to stream live events through the Vevo platform.

One theme that emerged from the afternoon’s panels was the need to not only use social media, but to be conscious of how they should be properly used. A common consensus was that artists need to be personally involved with the fans through these new technologies; Jenna LoMonaco of Glassnote went so far as to say that they will not sign an artist unless they are personally connecting with their fans through social networks.

On deciding which social media to use, Mark Ghuneim, CEO of Wiredset advised “If it doesn’t make money, save money, or build your band, then don’t do it.”

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