Interview with Mark Meharry, loosely transcribed from a conversation on BBC Introducing: Fresh On The Net on Sunday April 5th 2009
TR: Towards the end of last year one of our Websites Of The Week was musicglue.com with its provocative slogan “You have been told file sharing has been bad for business: you are misinformed.” It’s the brainchild of Australian online music pioneer Mark Meharry. How did you first come up with the whole idea of Music Glue ?
MM: Really just looking at what was happening in the world when Napster arrived on the scene, and how the record companies dealt with the changes that were happening online. Napster allowed users to post their music collection online and share that music with others – it’s now called peer-to-peer filesharing. Napster completely revolutionized the way people acquired music.
Actually the recording industry worked quite closely with them and were a long way towards doing a deal with them. But they asked for approximately 90% of the company in return for not suing them, and the Napster guys backed away from that. And in the end they went to court – and lost. But you can’t stop change and this new cultural phenomenon is the way most people now acquire music. The global trade body for the recording industry estimate 95% of all music acquired at the moment is through file sharing. And no matter what has been done to try and curb that behavior, the percentage is actually getting higher.
So when you look at the numbers you think, well, if 95% of the people are doing it a certain way then that’s the culture and you need to be doing it too. And if you’re not there, then you’re not really in the game. That’s where we started from. Lets find out about filesharing. Let’s work with these people and interact with them. Let’s find out who they are – and provide that information to the bands themselves because that information is invaluable.
TR: So, the central premise of MusicGlue is to actually get into the swim of filesharing and become part of it?
MM: Well there are a number of touchpoints on the internet where consumers go to find music. MySpace is still probably the biggest one. What a lot of bands get wrong on their MySpace pages is that they have a link off to iTunes or some other retail store. And at that point, they’ve lost their consumers. People have come to THEIR site which THEY control. And the band have sent them away to some multinational company. But at that point – if you don’t have music available for free on your MySpace – then pretty much everyone will go to places like LimeWire or PirateBay instead.
So our opening premise was: get your music out there. Get it into the places where people are looking for it – and find out who those people are. Interact with them, develop a relationship with them, and nurture that relationship. Later on down the line then you can commercialize that relationship.
TR: So you’re saying many bands have got it wrong by trying to maintain the traditional model where we make bits of plastic – or the digital equivalent – and exchange them for money?
MM: Recorded music as a retail product is coming to an end. We saw it at the end of last year with high street retailers like Woolworths and Zavvi going bust – and that’s an obvious shift that was always going to happen. Though the recession has probably increased the speed at which it’s happening. But, yeah, music is moving away from being a retail product – to what we refer to as “content”. And content is not necessarily something you sell. Content is something that you provide – and then monetise through other means.
Commercial radio is a great example of that. They provide the musical content for free and make their money from putting their adverts in with that content. They don’t sell the actual music. It’s the same if you watch Formula One cars driving round a track on Sunday afternoon on TV. You’re not paying to see that – but someone is making an awful lot of money at the time. What they’re doing is simply providing content to you.
Music is a performing art – and always has been. So the Music Industry has been around for a very long time. In comparison the Recording Industry has been around for a very small amount of time – and that’s the part that is currently going out of business. They’re really struggling to modify the way they operate within the new world of the internet. That’s not a problem for artists because the Music Industry is going to survive, and artists are going to survive: they’re always going to continue making music.
But their revenue’s not going to come from the ability to sell plastic discs (or music online) and, to be fair, it really never has done. It’s always been multinational corporations that made all the money in that area – not really the artists.
TR: That’s certainly been my experience of the thirty years I spent as a recording artist. Perhaps five percent of my income came from record company royalties, and the rest came from (gigs, merchandise and) getting played on the radio. Not all musicians realise you get paid (through PRS) everytime a song you’ve written is played on the radio.
MM: Absolutely. Once again it’s music as content – not as a product.
TR: So what is it that MusicGlue can usefully provide to bands if you can’t offer them money? How does the information you pass on to them end up of being of use?
MM: The information is invaluable because it’s contact and location information. The majority of bands out there do tours to try and reach their fans – they generally don’t really know where those fans are. They might play a gig in Manchester to one person, when in fact they might have fifty fans over in Liverpool. So the deals they do with promoters are based on very poor information.
We enable bands to go to a promoter and say “Look, we’ve given some music to fifty fans in Liverpool and we want to come and do a gig here. Now, what’s the deal?” And we know the promoters will put them on because we’ve already worked with those promoters. We let bands then sell the tickets directly from their website, so they become the ticket agent, again controlling all of the information. So they can profile their fans. From day one this fan found a track on LimeWire, then downloaded another track off MySpace. Then went to see a gig in Liverpool, then bought this T-shirt. Now they’ve got hold of this album etc. So the band can get back to that fan and go – “hey, you’re one of our VIP’s now, why don’t you come into the fold”.
TR: But if people are downloading the stuff for free on LimeWire, then how do you insert MusicGlue into those illegal transactions and manage to involve the artist?
MM: We’ve got a little bit of a trick on the music files. You upload a song onto our servers and straight away we seed it onto a filesharing network. The file’s got an interactive wrapper, for lack of a better term. When you try to play the track, a screen will appear that’s controlled by the artist. They can even put a YouTube video in there. Marillion did one where they had the band sitting in a room saying “Hey, it’s us. You’ve just got hold of our new album. That’s great – we want you to have it – we just want to know who you are.” It’s as simple as that. It’s interactive music, if you like.
TR: Okay – so the fans needs to supply a valid email address in order to authorise the download. But how do you find out where they are?
MM: That’s based on IP address. You’d be surprised – when you connect to a website – how much information is shared with the company hosting that site. The language your computer is set to, the operating system, the time that your clock is set to – and also the location, right down to city where you’re located. We use some of that information and pass it back to the bands. For the smaller groups it’s fascinating. London-based bands have fans all over the world at the moment because kids on blog sites don’t know territorial boundaries – there’s no such thing as a band from a particular part of the world any more. What counts is whether a band plays a particular sub-genre of music that’s relevant to a particular part of the internet. Groups need to find out where those kids are – because they want get out on the road and play to them.
TR: So you offer that as a service
MM: Yeah – absolutely. Enter Shakari are a great example. We have a global map set up where you can see all of your fans, you can drill down into a particular towns. And for their booking agent, that’s absolutely bang on for what they need to put their tours on around the world. And this year they’ll be out on the road across the globe – based on where their fans are.
TR: So rather than selling their music as a piece of product, they use it to extend their fanbase. And then monetise that relationship at gigs with ticket sales, merchandise and what have you?
MM: Yeah. The new model is: get your music out there then find where your fans are. Don’t try and sell it to them. There’s always a transaction involved – don’t get me wrong – you don’t just give your music away. The transaction is information; information is invaluable. You can maximize your income from other revenue streams – based on the fact that you know where people are. And that you can interact with them before you even get to playing the gig. You’ve mentioned merchandise – which is a fundamental part of an artist’s revenue, even for the biggest bands. The Darkness sold, you know, four million records worldwide, Justin’s a mate of mine, and he hasn’t seen any royalty cheques from those records. So the idea that you make all this money by selling all these records as a major recording artist is a bit of a fallacy. They made their money live. You headline Reading Festival, and you get a million quid. That’s very nice. You sell merchandise and sell truckloads of it. It’s not about the records
TR: One final question though Mark. What future can you see for the kind of songwriters and recording artists who work in their bedroom, and don’t make the kind of music that can be performed live.
MM: As we’ve mentioned, if you get your music played on radio, you’ll get an income – and that’s a fairly good income. Any commercial organisation that exploits your music (by using it as content) will still have to pay for the exploitation they’ll be making money through. There are ways of still making money from that: you maybe able to get your music onto some adverts or synced in with some television shows. If you can build up a fanbase online, once it gets to a certain size, you can provide (controlled) access to other companies. It’s not about selling your soul or trying to brand yourself as the Red Stripe band or whatever. It’s about the fact that there will be companies that want access to your fanbase and if you are clever about how you do that, there are ways of making money out of it.
TR: The place you can go to check all this out for yourself is MusicGlue.com. Mark Meharry – thankyou very much for coming to talk to us.