Wednesday, October 10, 2012

SF MusicTech Summit: Big Predictions, Blanket Dismissals, and Lots of Bad Words

Posted By on Wed, Oct 10, 2012 at 9:20 AM

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Prediction: In 10 years, no one's going to care about owning music as long as they have access to it.

Prediction: No one except for .1 percent of music listeners and Neil Young will pay for Neil Young's high-quality digital audio service.

Prediction: In 3030, mashups will finally be legal.

So it went yesterday in Japantown, as another edition of the twice-annual S.F. MusicTech Summit drew hundreds to conference rooms at the Kabuki Hotel for a day of schmoozing 'n' boozing, panel discussions, jargon-duels, public cussing, and more schmoozing 'n' boozing.

Like any tech conference, many of the formal panels focused on arcane issues of interest mainly to insiders, like the disappearance of producer/engineer/artist credits on digital files, or the logistics of crowdfunding. And many of the hallway conversations consisted of would-be entrepreneurs pitching their business ideas to actual entrepreneurs or potential funders. One even panelist quipped that he'd heard someone pitching a site that's "like Pinterest mashed up with Facebook and iTunes" at least a dozen times.

But there were some juicy kernels of wisdom to be found, too.

One of the day's most interesting talks was entitled, "Predictions, Proclamations, and Educated Guesses," and featured industry experts like former Rhapsody vice president and Too Much Joy frontman Tim Quirk eliciting prognostications like those above from panelists.

The conversation rambled from subjects like YouTube -- and how artists like Gotye made direct deals with the site rather than going through their label -- to Kickstarter, with basically everyone predicting that the crowdfunding site will have an enormous impact on the music industry's future. Theda Sandiford, of Universal Republic Records, even told how one of her bands, The Last Bison, crowdfunded a music video on Kickstarter after the label refused to pay for it. The band ended up spending $5,000 on a video that would've cost the label $20,000 to produce, she said -- and got a big response.

Quirk, the moderator, made some of the funniest comments himself. Bringing up the subject of social media -- and noting the absence of any discussion of once-hot site -- he asked, "What's the next big social thing and how soon will people not care about it anymore?"

When the subject go to legalizing mashups, Quirk half-jokingly offered 3030 as a potential date of total freedom. "There's more money to be made from suing than there is from selling," he insisted.

Music-tech entrepreneurs are an interesting bunch, because while they share the utopian ambitions of most tech types, the realities of the industry -- basically, the iron shackles of copyright law -- have kept even the best ideas from coming to full, profit-making fruition. And all but a few venture capitalists have abandoned music investments altogether, seeing no way to make money on them. So of course an afternoon panel featuring five VCs who actually do invest in music companies was packed with bodies and questions. And the panelists wasted no time in dismissing bullshit.

Noting that Americans spent five times more hours with music than with sports, Haney Nada of GGV Capital asked why sports is a $500 billion/year industry while music is only $70 billion/year. "What the fuck are you guys doing?" he half-yelled to the full room.

Nada also brought up the small group of people who spend tens or hundreds of thousands of dollars building virtual arsenals in video games, and wondered why the music industry hadn't found a way to bring in revenue from similar megafans, or, as he called them, "whales."

We suspect the panel shot down a lot of funding dreams yesterday afternoon, insisting to would-be entrepreneurs and artists that, unless they have a plan for a billion-dollar company that will one day see an IPO or get sold to a larger firm, they have no business taking venture capital money.

"If it's a lifestyle business, don't take any money from us," Nada said.

But the panel also illuminated what makes them want to invest. Patrick Knealy of IDG Ventures remembered seeing a demonstration of Shazam for the first time. "You hold up your phone and it tells you what song it is," he recalled. "They had us right there."

Not all of the panels lived up to their billing. An afternoon session on electronic dance music featured an interesting table full of party promoters, public relations pros, and DJs like Aaron Axelsen of Bay Area modern rock station Live 105. But the conversation largely got bogged down when one annoying questioner pressed the group repeatedly on why the artists who provide visuals at EDM shows don't get equal billing with the artists. (All of the promoters on the panel said they either had given the visual artists credit, or that the visual artists didn't want it. But the questioner kept bugging them anyway.)

Ryan Mac, a Forbes writer who helped compile the magazine's richest DJs list, said it was Swedish House Mafia selling out Madison Square Garden in minutes that brought the magazine's attention to what he said was now a $4 billion/year industry. And Jason Boyle, who works for Insomniac -- the promoter that puts on Electric Daisy Carnival, among other large dance events -- said there will be twice as many tickets sold to dance events in 2013 as in 2012, a number we found stunning.

One questioner pressed Axelsen on why Live 105 doesn't play more modern dance music.

"It's important for radio stations to be one step ahead of our audience, not five steps ahead of our audience," Axelsen said. He said getting his listeners to want to hear new music was like "getting a three-year-old to eat broccoli," and that the way to get a three-year-old to eat broccoli was to smother it between two things the child likes. So, "when I introduce Bassnectar to the Bay Area," Axelsen said, "I smother it between Sublime and Linkin Park."

You could hear the EDM fans shuddering.

-- @iPORT

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Ian S. Port


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