Labels turn tables

'Net not bad for music majors, veep insists

The Internet hasn’t killed music record labels just yet. And isn’t about to, an industry leader asserted Tuesday.

“The Internet is not a threat to the music industry,” Jay Samit, senior veep of new media for EMI, said during his keynote speech at three-day music confab Webnoize 99, held this week at the Century Plaza Hotel. “Anything that can get 300 million ears together has to be a good thing.”

Samit set out to disprove what he said are several popular misconceptions about the ‘Net’s potentially disastrous effects on the traditional music biz.

The myth Samit most despises is that “brick and mortar (music retailers) will crash and burn.”

“I’m the most ardent advocate of the ‘Net,” Samit said. “But physical goods are still going to be 85%-90% of sales.” In the Internet age, “record companies can help retailers sell their products.”

Predicting a big year ahead for broadband ventures, he suggested that labels build high-speed music-streaming kiosks inside stores to boost promotion of new artists.

Majors dominate

Also nonsense, according to Samit, is the notion that dotcom upstarts will eventually destroy the majors. In 1999, he said, “160 IPOs raised $19.9 billion, but the top 20 most-visited sites are owned by six major companies.” Samit believes the competition among thousands of companies vying for tiny slices of the online music biz is pointless, “when we should be learning to work together.”

Artists will “always require our help in promotion and distribution,” so the notion that artists will discard recording companies altogether is another fallacy, he said. “With 600 million Web pages out there,” he asked, “how does an artist rise above that clutter without help?”

And the 24% of people who required tech support downloading David Bowie’s latest CD proves “digital distribution of music is not necessarily profitable,” in Samit’s opinion. “There is a reason why AOL continues to crank out and mail millions of its software CDs,” he added.

Custom CDs strong

Still, the ‘Net is here to stay. Samit couldn’t ignore the fact that songs have been legally downloaded from music sites over 1 billion times since January — a sign that consumers are willing to pay for digital products. And the burgeoning development of personalized radio and custom CD services on the ‘Net certainly smells successful, “but no one really knows yet which one will make money,” he pointed out.

At Webnoize, EMI Recorded Music also announced it has pacted with Microsoft to distribute more than 5,000 of its musicvideos online using Windows Media Player — the single largest conversion of musicvid content from a major label into any streamed digital media format. Nearly 200 vids are available now on EMI’s music site (Hollywoodandvine.com).

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