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SXSW Industry and Culture Dispatch: The Future of Online Music Videos

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Sunday, Mar 21, 2010
Label reps and video distributor executives share their hopes about the potential of music videos, everywhere and anywhere: monetize, monetize, monetize.

Thursday’s “The Future of Online Music Videos” panel, featured Nick Stahl of Brightcove, an “Internet TV service that provides everything you need to add video to your website”; Alexander Kisch, who is responsible for all incoming content and its syndication at VEVO, a video and entertainment site, owned by Sony, Universal Music Group, and Abu Dhabi Music Co.; John Sasso who heads advertising for all Sony sites, artists and labels; Eric Snowden, who defines and scopes Atlantic Records’ digital product; and William Wilson from the National Association of Recording Merchandisers (NARM), which is a think tank for standardizing the streaming of digital content.  There were no music artists or video makers on the panel.
  
Guess what? They think videos are an important part of the evolving industry, but their long-term strategies are very, well, short-term.


Stahl moderated the session, kicking it off by explaining that the labels he works with face the same challenges that everyone does: keeping current in the whirl of contemporary digital culture, amid “hundreds of labels, thousands of websites, tens of thousands of videos”. According to Stahl, video is now one of the key marketing and advertising strategies for labels, since people (artists and fans) want high quality video and security (when they click on a video). For these guys the key industry term is “monetize”. They want to know how you leverage videos to make money through merchandise, ring tones, digital downloads, anything.


The panelists insisted on differentiating between videos in their different site contexts. Seems sensible. You can’t expect people to be interacting with videos on YouTube in the same way they do on the artist’s website, or the label’s. People come to YouTube to consume (without paying) or diffuse videos; they come to the artist’s website because they already have a deeper interest in that artist, and they want to go further, learn more and hopefully buy merchandise. The ever helpful label tries to put the right video in just the right place so the fan can find it when searching. Once again, these guys see videos, like social networking tools, as a fundamental means of creating a relationship when a video is watched.


Wilson’s organization deals with more legal issues generated by the proliferation of online videos and their importance to fans and the industry (labels and artists especially).“Our organization shifted from the operational side of physical to digital business,” he said.  There are “incredible complexities” to assigning rights to user generated content.  For example a fan makes a “home video” with a copyrighted soundtrack. The label, which owns the recording copyright, must decide if they’re going to take it down or monetize it. What will the criteria be for permitting such content? It’s all about whether said video could be used to advertise something at no cost to the copyright owner—or stained them in some undesirable way.


Stahl asked whether the label reps had more interest instead with generating direct content, trying to create a more cohesive label brand? Snowden responded, “Atlantic is extremely difficult to define. Smaller labels can do that. Rock country, hip hop, etc. But Atlantic is more difficult”. Sasso responded, “I’m not working for one particular label, since I work for Sony, but I think each label has different ideas about brand identity”. He cited the successful JIVE records. “People don’t know the name but Britney Spears and Justin Timberlake are on the label; they haven’t promoted the brand as much”. Kisch responded that for VEVO, the artists are the key brands. “But with the advertising community, we want them to know we’re the ones doing this,” he continued. Of course, they’re not a public service. They want advertising revenue.


Finally, they were asked about how they viewed music video distribution in 2010.  For Snowden, the “interesting thing for mobile is it’s been the big year for it four four years. The right network is key: 4G is being rolled out”. When we see shifts like that (from 3 to 4G), that’s when we see sea-changes, he said. We notice, “Oh this is how it’s supposed to be.” And then behavior changes (in this case, as regards mobile video consumption, as well as production and posting, perhaps).


At times, they do actually sound like public service providers, an industry strategy I noticed in many panels. “We try to let fans do what they want, when they want, where they want. It’s only going to grow in that direction,” Snowden said. But it doesn’t take long for them to get back to the hazards of investment and revenue. Snowden said it’s difficult to know what to invest in. In the 90’s many digital start-ups went under because they didn’t have the bandwidth and security. That could happen now.


For Kisch and VEVO, globalization is about standardizing content, streaming and rights. The most common complaint he gets is “Hey, I’m in the Netherlands, why can’t I watch this video?!” Kisch says it’s often a no-win situation for anyone with that kind of thing. “Content providers are not getting to monetize, advertisers are not monetizing, and the user is unhappy. We’re working hard on this but it will be a challenge.”


The global state of digital video affairs is exciting and frightening, they all insist. “The scary thing is the same thing has continued; the decline in business is not matched by decrease in digital business. The industry in depression mandates a change that hasn’t happened yet.” said Sasso.  “The exciting part is there has to be that change.” He points out that music is more popular than ever, and the amount of bands here and in different genres is staggering.  Given the exciting potential to global circulate the content, Sony’s Sasso says he and Sony “want to work in partnership with artists and their labels to find an excellent way to deliver the music to fans. From VEVO to subscription, to Amazon and iTunes, it works well with that, but people need to work more together, because nobody’s winning right now”.


Overall they seemed encouraged to think that panels like this one were a step in the right direction for their common goals.

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