So, having just completed my Prince2 qualification, from Jan-June this year I took a full time permanent job over at Universal Music. Working within the digital operations team and with an external Paris based software company (Digiplug / Accenture) I project managed the launch of a new digital supply chain platform for those partners not able to host content themselves. The connected model is an extension of their traditional digital supply chain that allows UMGI to deliver files direct to consumer on behalf of the partner. Instead of zipping up some MP3s and handing them to them and hoping they report properly and don't do anything wrong.. all we have to do is send an xml feed that controls a 3 way conversation between the partner and the user (which may or may not involve a transaction) and UMGI and the delivery of the files to the user.
The concept itself is very interesting indeed... I had a couple of people from elsewhere in the industry scoffing it a bit as though we were expecting to stop giving iTunes MP3s and demand that we have the relationship with the consumer instead. Missing. The. Point. Big. Style.
There are a couple of places in which the connected model gets used. Yes, there may be new online retailers who would *prefer* to work in this way (perhaps they might get a better deal to do so). But actually the best places to use this are for business development deals and internal purposes (artist stores, internal spotify-like systems).
I find music bus dev (business developement) very interesting. I'm going to assume whoever is reading this knows nothing about business development within the music industry (doesn't seem to exist in book publishing) and explain a little bit about it. So business development teams tend to handle non-retailer licensing deals (amongst other things). That could be a fashion website in Russia or France or wherever just wanting a give away 100 x MP3s of a hit single on the landing page for their website or it could be a car company wanting to bundle in access to your whole catalogue for anyone purchasing their musicy named car. Get the picture? Well, as revenue has fallen for record labels in the traditional sense these sort of deals have increased year on year as they struggled to make money esp. in those markets massively affected by piracy. Often times with these deals you're working with companies for whom handling large catalogues of MP3s is not necessarily something they have done before. They usually deal with flakey designery digital agencies who make pretty pages for them not techies who know how to parse huge amounts of data accurately. This also adds time to the process. And you may even find that one artist who suddenly demanded the issue of takedowns mid campaign.. umm.. that doesn't get taken down. New titles don't get added effectively either. And so on. Worse still.. you find that with unheard of brands or untrusted ones you simply can't risk working with. They leak. Or maybe they won't, you'll never know it just feels too risky. So whole swathes of smaller (potentially profitable) deals have to be.. ignored for now.
Now Spain is one of *the* worst places for piracy. The industry is truly on its knees (I'll add some stats later). No one wants to pay for music. Now, what if a bank or a brand decides they would like to give away access to music as part of their student account. They want to pay you x million euros to do it. Money you would not have otherwise as individuals don't want to pay for musc.. and yet these guys want to pay for it for them. But they need it quick, they don't have a big development team and you're not sure you can trust them to implement it properly. Along comes... ba da bing.. the connected model. All they have to do is integrate a regular xml feed via ftp. No files handled. No storage space required. A take down gets issued up stream of the connected model by the record label to tell iTunes something needs to be removed so naturally the xml feed gets told at the same time. Ping! its removed. 30 new releases get added to the digital supply chain and all the stores are updated. Again so is anyone using the connected model xml feed.
So, in short what does this all mean?
1. Unprecedented control over the terms of use when dealing with partners (as you can switch anything on or off rather than giving them the files and asking them to be nice).
2. Increase in market share (you can access more deals than otherwise).
3. Much quicker and cheaper for brands / partners to integrate.
Well, its all a bit distasteful I suppose. But its certainly interesting. One of the key affects of the internet has been disintermediation. The internet disintermediates people like the record label and as a result control is lost. By re-intermediating in this instance.. everyone wins.
So the big question for me is.. if people don't want to pay for music. And someone else wants to pay for it for them. Whats wrong with that? And in which case why the hell hasn't Orange or similar done a deal for a contract whereby spotify is bundled in? Well I guess there's probably a reason. And I guess its not really my problem anymore as I've just left the music industry. More on that later :)
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