A tip of the hat to Steven Noble for sending me the link to a video by Gerd Leonhard about Music 2.0.

Gerd has a really interesting take on how the music industry needs to focus on what the consumer wants to buy and how and where she wants to engage, rather than the music industry focusing on how they want to sell their products to the consumer...

The problem that remains of course is that the ecosystem in the music business is much more complex than people generally realize. And the key area which is not easily understood is the role of the songwriter. The songwriter assigns his or her rights to a publisher and often the publisher assigns some limited set of rights to a collecting society. Somewhere in there one of these organizations license the record producer to enable the production and replication of the master recording. Its at this point that it becomes seriously difficult, and nowadays more than ever.

The reason for this is that when the music business was young and pre-digital, there was a significant cost associated with manufacturing, warehousing, printing, distributing product. With the advent of digital that cost goes virtually to zero. But the regulatory structure that is in place means that publishers (and through them, songwriters) are still being paid as if the record company had all that overhead.

The result is that the margins going to the record companies have increased massively. The publishers - I imagine - want a bigger slice of the cake....

The reality of course is that they should all move their focus onto how to make a transaction easier for the consumer. And that is the focus of the video and book by Gerd. Definitely worth looking at.