Music biz is turning tech to its advantage

Stringer puts positive spin on progress

Having been broadsided by the explosion in digital piracy, the entertainment biz is regaining its footing and is taking steps to turn the tide of new technology to its advantage, Sony North American chief Howard Stringer said at a Gotham media confab Wednesday.

Stringer, who shared the dais with Infinity Broadcasting chief John Sykes and moderator Ken Auletta, said entertainment companies — particularly record labels — have learned from early missteps and are moving to turn technology into an ally rather than an adversary.

Letting go of pain

“The masochistic phase is over for the music business,” he said. “They’re acknowledging that there can be benefits to this change. Resistance to the CD format was overwhelming initially, yet the CD is responsible for the biggest growth in the history of the business.”

Stringer acknowledged, however, that the future for the music industry was far from certain, as evidenced by the difficulty in assigning a firm value on music assets in an increasingly consolidation-happy marketplace.

“I don’t know exactly how you evaluate the value of a music company when the future is so unclear,” he said. “That’s going to be shown in the Vivendi Universal bidding,” he added, referring to the French conglom’s planned sale of entertainment assets that may or may not include the music unit.

Exec was critical of the pro-consolidation mood permeating the music industry in recent months, prompting widespread speculation that the number of major record labels will be reduced from five to four before the year is out.

No mania for mergers

“When I see that two music companies are going to merge, I don’t get very excited,” he said. “Concentration has its economic advantages, but it also has its creative disadvantages, and I think they can be profound.”

Event — one of a series of breakfasts convened by Syracuse U.’s Newhouse School and the New Yorker magazine to discuss media issues — set out to tackle the question of whether showbiz should treat emerging technologies as friends or foes.

Sykes, who moved into his job last year after heading up cable channel VH1, said the film business appears to have learned a great deal from the record industry’s woes.

Movie maneuvers

“The movie business is very, very well organized, and I don’t think they’ll make the same mistakes,” he said, adding that Hollywood’s ability to distribute its content through multiple sales options will serve as an added layer of protection against technology-related risks.

Stringer acknowledged the advances made by Apple Computer boss Steve Jobs, whose online music store iTunes has sparked renewed interest in downloading music legally, but added that bigger players, like his company, will have a role to play in bringing digital music to the masses.

“Apple is a wonderful, beloved operation with a 3% market share,” he quipped. “That shouldn’t be threatening to Sony.”

He noted that Sony’s music division was the last of the five major labels to sign on to the iTunes music store service, because the company’s technology wing was developing its own digital music formats with higher levels of anti-piracy security.

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