The music panel featured Andy Lack, the chairman of Sony BMG, who somehow contrived to be reasonably upbeat about the recorded-music industry. It was his misfortune to be sat next to Quincy Jones, who lost no time in bursting his bubble: "Old lions, new lions, middle-aged lions, none of them have a clue," he said, saying that right now he hasn’t seen a single idea. "There’s not one solution. We’re not even close right now."
The thing which interested me about the panel was that there was a general agreement that the music labels are still necessary: no one has yet really managed to break through and become a popular artist without their help. I think that’s partly a function of the sheer size of the US market, along with the number of media outlets: while the Arctic Monkeys, say, or Lily Allen, can become overnight sensations in the UK, that kind of thing is almost impossible in the US without an expensive and sophisticated media strategy.
While the labels might be necessary, however, there was also agreement that they won’t ever be the powerhouses that they used to be. Small bands will essentially hire the labels in order to make themselves big bands, but once they’ve achieved a critical mass, they can jettison the labels and go it alone if they like. "The role of a record company is to discover new music, to find all those artists whose names you don’t know, and help them become big stars," said Lack. "At a certain point they’re going to leave you, and all power to them."
So the slow and steady decline of the record labels does not necessarily mean a similar decline for recording artists, who were historically treated pretty badly by the labels, and who are often doing quite well for themselves these days as the internet helps them to connect with their fans in a much more immediate and frequent way than they ever could before.
Meanwhile, the explosion of video content means that film and television are using – and paying good money for – more music than ever before: as the consumer channel declines, the rights channel is doing very well indeed. And of course the live-music industry, too, has never been healthier, across the spectrum from big stadium shows and festivals to smaller gigs promoted at zero cost through email lists.
The Milken Institute did miss an opportunity, I think, by not putting Peter Chernin on the panel, since by the end of it News Corporation emerged as the most important single entity in the music industry. That’s partly due to the astonishing success of Fox’s American Idol – the most popular television programme in the history of television, and a surefire generator of huge hit records – but mainly due to MySpace, which has brought music into the social-networking era in a way that the record labels have signally failed to do. There are 9 million artist profile pages on MySpace now, and the labels have reached the point at which they’re hoping that MySpace, along with mobile phones, will somehow be the new revenue stream which will save them.
In the long run, I don’t think that the record labels have a great deal of hope. They dominate iTunes at the moment, but that won’t last forever, and when anybody can upload their songs onto iTunes as easily as uploading a video onto YouTube, one of their last remaining moats will be gone. But I do think that the music industry more generally has a bright future ahead of it.