Music, TV and digital disruption

 
Netflix on tablet

Music and television, two creative industries which, in the fashionable jargon, are being "disrupted" by the internet. But there is evidence this week that music is at last getting to grips with that disruption, while the TV industry - where change has come more slowly - is suddenly getting nervy about a scrappy outsider.

The BPI's annual Digital Music Report has been charting the changes in its industry for a while - but the latest edition seems to show that 2012 was the year when the digital revolution finally began to start paying and stop hurting.

More than a quarter of all adults are now purchasing downloads or using legal streaming services, and in the third quarter of 2012, 51% of UK record label revenue came from digital sales.

Bad news of course for the High Street (no wonder HMV has struggled) but evidence that British consumers have finally got the legal digital habit.

Is pirated music going out of fashion? No, the survey shows that 345 million tracks were downloaded using BitTorrent in six months, and that's just one source.

But in the same period, 239 million tracks were legally downloaded and, given that the industry used to reckon the ratio of illegal to legal downloads was 10:1, that looks like progress.

There is certainly a new mood of optimism amongst the record labels and the report looks to an even brighter future where we all keep our legally obtained music in the cloud and stream it to our cars, our phones or our TVs, wherever we go. "We're actually looking to a future where revenues could grow!" an insider told me with some excitement.

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After years in the digital jungle, the music industry has got to grips with the idea that content plus convenience is the answer”

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After years in which the industry has been slow to see the way through the digital jungle, it's at last got to grips with the idea that content plus convenience is the answer.

Sure, consumers like the something for nothing that illegal file-sharing offers - but if you make it simple and attractive to get good music legally, they are increasingly happy to pay for it.

Television has had a rather different experience with digital disruption. Fifteen years ago we assumed that the internet was about to cause major upheaval in the industry, with the channel, the schedule and live broadcasting all doomed to extinction as savvy consumers compiled their own menu of on-demand viewing.

But in the UK that hasn't happened anything like as rapidly as predicted. The vast majority of TV viewing still involves turning on the main set, sitting back and watching what's on the main channels.

In this industry, content and convenience have worked so far in the favour of the incumbents who can offer viewers plenty of compelling programmes and a simpler way of getting them than fiddling about on the internet. So television executives have become a little more relaxed about the threat to the status quo.

This week, though, I think I saw a threat to that complacency.

Kevin Spacey Kevin Spacey is the star of Netflix's House of Cards

Sitting in bed, I started watching on a tablet computer the excellent Kevin Spacey in the American remake of that great 1990s political thriller, House of Cards. The series has been made not by a major broadcast network but by Netflix, the movie- and TV-streaming business which arrived in the UK from the US a couple of years ago.

So far, it has made little impact here, struggling to match BskyB when it comes to hot new movies. In fact, I'd been about to end my subscription when I saw the publicity around the House of Cards launch.

It looks as though Netflix has also learned that "content plus convenience" lesson. You can have the smartest technology platform around, but nobody will be that interested if you haven't got something to watch which can't be found elsewhere.

And if the big content providers won't give you want you want, then make your own compelling programmes. It has cost Netflix a tidy sum - $100m apparently - to make House of Cards, but if that helps to build a global customer base it could be worth it.

So, for a modest monthly fee you can now watch a whole top notch drama series without waiting a week for the next episode, and without having to turn on the TV or remembering to record it.

If that catches on and is imitated by other new suppliers of video content, then maybe those predictions of the death of traditional telly won't look so far-fetched.

 
Rory Cellan-Jones Article written by Rory Cellan-Jones Rory Cellan-Jones Technology correspondent

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  • rate this
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    Comment number 103.

    @96.Lamna nasus
    ".. and a lot of people are unaware that there is still a radio licence requirement if you do not have a TV licence.. very few people do not listen to the radio, as well as having ditched the TV."


    You don't need a radio licence any more - that went years ago.

  • rate this
    +1

    Comment number 102.

    @94 - you are wrong, Watching catch-up TV does not require a TV licence. Here is the extract from TV licensing site,

    "Exception: If you only watch catch-up services online, then you don’t need a licence. For example, you don’t need one to use BBC iPlayer, or ITV player, to catch up on programmes after they have been shown on TV."

    Pretty clear. No mention of battery-powered devices.

  • rate this
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    Comment number 101.

    100. Graham

    Nonsense. I can play downloaded music on any of my devices, and transfer it between them, portable or not. And music is non-physical, so you can NEVER "own" it: there's nothing to own, it's just sound. All you "own" is the format it came in, which, as we've seen, can become obsolete.
    Also, playback quality depends largely on your set-up. Mine sounds terrific.

  • rate this
    -1

    Comment number 100.

    It's all very well downloading your music but there are more negatives that get overlooked than positives. Most compressed music files are of such an inferior quality compared to cd or dvd. If you buy from iTunes, you never actually own the music and are only able to play it on a portable player... Made by Apple (surely this is an illegal restriction under EU law).

  • rate this
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    Comment number 99.

    96. Lamna nasus
    "very few people do not listen to the radio, as well as having ditched the TV."

    And I'm one of them! There is really very little in the way of so-called "entertainment" I actually find remotely entertaining.

    I get all I need from books and the internet. The only decent TV I've seen recently is QI (on YouTube) and The Big Bang Theory (I bought the DVD's).

  • rate this
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    Comment number 98.

    Watching a series week by week is more than fine for me. It provides something to look forward to, and when the program.is good, something to talk about and anticipate.

    By the way I don't think that something of only three episodes can be called a series. Minimum six or seven. Whatever happened to thirteen or twenty six episode series ? I'm showing my age, and my ability to be patient.

  • rate this
    +1

    Comment number 97.

    This article continues the BBC's perpetuation of the myth created by the BPI that it represents"the music industry". No. It represents three huge labels and their partly owned "idependent " labels. The majority of music being released is by artists and labels that have no connection with the BPI and whose sales are not recorded by them. I wish the BBC would learn about the music world.

  • rate this
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    Comment number 96.

    @94

    .. and a lot of people are unaware that there is still a radio licence requirement if you do not have a TV licence.. very few people do not listen to the radio, as well as having ditched the TV.

    Personally I think most people who complain about the BBC licence are suspiciously uncritical of the alternatives.. most (not all) of the Australian Sith Lord's output is junk and its expensive

  • rate this
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    Comment number 95.

    I love my Netflix & TV Anywhere and they are good value for money - but for how much longer?

    When companies finally realise that no-one is watching their commercials they will stop paying for them, and no commercials = no money.

    This means that the sole revenue will have to come directly from us, think it will still be cheap then?

  • rate this
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    Comment number 94.

    @38.farmerwardy
    8 Hours ago
    "People dont realise that the tv license is for watching programmes at the time they are broadcast, watch them a few hours later, in your own time on the net and you dont need the license."

    Not strictly true. The device you are watching the content on has to be battery powered. If it is plugged into a power source whilst you're viewing, you need a TV licence.

  • rate this
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    Comment number 93.

    @90
    Interesting point Graphis.. surely tech is moving the industry back to 'cheap' music promoting live shows again, like it was in the 60s?.. although it never entirely went away, with Punk in the 70s and the rave music scene in the 80s/90s..I think packaging still has its place but as a niche product
    The film industry is more complicated, indy films are possible, but with major CGI, not so much

  • rate this
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    Comment number 92.

    @UnderDefeat, I'm not sure which catchup services you are using, but the quality of IPlayer and Lovefilm on my PVR is HD and rather superb. I also have my Win 8 PC hooked up to my living room TV which only has normal Freeview so watching all the catchup services & Lovefilm through the computer in HD makes it actually higher quality than the broadcast services I can receive on that TV.

  • rate this
    -1

    Comment number 91.

    @89

    Fuzzy that analogy is comparative to anarchy.. if its easy to take, then take it.. so if someone pinches your MP3 player in the street, if it was 'easy' then it wasn't robbery?.. anarchy sounds like a good idea to the idealistic but what it really means is groups of large, muscley people with weapons rubbing your face in something unpleasant and laughing because there is no-one to stop them.

  • rate this
    +1

    Comment number 90.

    87. Lamna nasus

    Oh, I'm not disagreeing with you: it used to be that live gigs promoted albums, but now it's the reverse.

    But music is an intangible product anyway: what you buy from record companies is actually just packaging, and nothing else. Downloading means we don't need the packaging, and that's why they're upset.

  • rate this
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    Comment number 89.

    Who should pay to protect artists' copyright? The general tax payer or the artists themselves? I suggest the latter, and it should be a civil matter not criminal. Technology makes it easy to copy stuff, and thus to produce, plus anyone can do it, so learn to live with it. If you don't like it, stop producing stuff, or carve it in stone tablets. When will oil paintings make a comeback?

  • rate this
    +3

    Comment number 88.

    The real reason record labels are so resistant to the internet is because they know it makes them obsolete. Artists can now directly pitch their music to the consumer. The distribution channel for music has completely changed. There is no possible justification for record labels’ extortionate management fees. They know this and they are scared.

  • rate this
    +1

    Comment number 87.

    @82

    Graphis you are not addressing the issue.. the 'loss of revenue' argument is a red herring with no side salad.

    I dislike greedy corporations as much as the next chap / chapette but piracy is theft.. buying direct from the artist is the answer.. and if they are nice enough to give you stuff free on their website (NIN and BMTH spring to mind) then buy tickets to see them play live in return

  • rate this
    +4

    Comment number 86.

    I'm happy to admit I have downloaded music without paying for it. But this is because I consider I have already paid for it: I bought it on vinyl decades ago, then I bought it again on CD. I'm sorry Mr Bowie etc, but you're rich enough already, and I've already paid you twice for the same songs. Why should I pay you again?

  • rate this
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    Comment number 85.

    This “problem” is entirely the fault of the music and recording industries. If they provided access to material at a competitive/non-arbitrage price, there would be no illegal downloads. Currently, you can buy a CD for £4-5, rip tracks and resell for about £2-3. The real price of an album is only ~£3 – this is what they should be selling at.

  • rate this
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    Comment number 84.

    Streaming is miles away from threatening TV. It can't deliver the same audio and visual quality to everyone. On the go resolutions are naturally lower, but 4G needs sensible data plans - and devices need much better battery life!

    Netflix and the like won't be a threat until internet caps vanish and speed increases for everyone. And we already have bespoke home viewing schedules with DVDs.

 

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