[by Mark Frieser] MIDEMnet was a bit different this year…in a good way. Usually it’s a one day event covering digital music media, though in recognition of the growing importance to the music industry of mobile content, the event was expanded to cover two days, with mobile now broken out into a full separate day, which we will cover in our next report.
As for the message of the industry in general, there was a lot of talk about the potential of digital music to make up for the ongoing reduction of revenues in the industry (the music industry on average had a 7% drop in revenue over the year before, though digital revenues have increased by more than 100% and in the US, Mobile revenues at the labels have increased from 500%-1000% in the last year dependent on the label). In addition there was discussion of new revenue models and tools available to sell, produce and monetize content.
In his opening of the first Day of MIDEMnet, Ted Cohen, SVP of Digital Distribution and Development at EMI Group gave the audience the message the industry has to innovate and evolve to succeed and not to get complacent (though, judging by the industry’s numbers, complacency should not be an option in anyone’s mind) setting the tone for the day in that he compelled participants to take advantage of the knowledge and tools displayed during the day that can practically help their business.
And in terms of knowledge, certainly the excellent keynote presentation of Eric Nicoli, Chairman of the EMI Group was a substantive beginning. Nicoli began by stating that EMI sees digital music sales as a rapidly growing part of the company’s revenue pie, representing 6% of total group sales in 2005, with 60% of those derived from digital and 40% from mobile products. According to internal figures, EMI foresees digital sales representing 25% of its total sales in the year 2010, certainly an ambitious, but according to Nicoli, an attainable and reachable goal the company is on track to meeting. The company’s approximate market share for digital is in line with that of its physical properties… approximately 10% in the USA.
More after the jump…
Additionally, the company is also increasing using digital to market product and to derive a deeper understanding of the fan. Using tools such as Myspace, mobile messaging, email, legal P2P services (EMI signed at the conference with Arvato mobile to license 300,000 tracks for the GNAB legal P2P service, including content in the form of ringtones, movies, games and recorded music) and making music buying a quicker and more convenient experience are all seen as crucial to increasing the company’s revenue from digital consumers.
Other issues covered by Nicoli include interoperability, stating that he would “like consumers to do what they want with their content” and that it would be better for the industry to work together to try to increase the pie rather than fight over a shrinking pie, and that in these early days, we need to create an environment of cooperative experimentation – and to remember the consumer is boss… And in terms of flexible pricing models, EMI wants them, states the music business is unique in its current single price model, and that flexibility works for both the consumer and the label more.
And as to the long-time rumors of a potential EMI/WMG merger, Nicoli states “Yes or No” I guess we’ll have to ask him again next year on that one, but for the moment, it looks like at least the digital/mobile story is a good one for EMI.