Digital Boom Divides Music Industry

By Angela Barnes, Sky News Producer

The digitisation of music has helped revolutionise the entertainment business, but frustrations between the music and tech industries are still rife - with streaming and the future of record labels at the forefront of the debate.

Radiohead frontman Thom Yorke renewed his attack on online music streaming service Spotify this week, describing the company as the "last desperate fart of a dying corpse", and condemning its relationship with the major labels.

Many rights holders have held back their music, including Yorke, and argue they lose out from streaming services as they get far less per song than if it was downloaded.

However, in its defence, Spotify points to the money it pays out to rights holders and told TechRadar that by the end of the year it will have given $1bn (£630m) back to the music industry.

Thom Yorke is not a fan of popular streaming service Spotify

It also said piracy had been reduced by 25% since it launched in Sweden just over five years ago.

British band Keane, who are 10 years into their career and set to release a Best Of album, don't see streaming as a problem.

Lead singer Tom Chaplin told Sky News: "That's just the world we live in. I think people like to cherrypick music. I do it, I make playlists all the time from different albums that I love."

Keane pianist Tim Rice-Oxley is not too worried either, saying: "I think playing live is still the most precious thing about music - it's something that can't be replicated whatever happens in technology.

"If you can put tracks up online, even though you are giving away your music, hopefully you are drawing people to come and see you live."

Keane's frontman says the live aspect of music will never die out

Despite the ongoing challenges, many in the music industry argue digital advancements are more constructive than they are destructive, enabling talented new artists to get off the ground without the backing of a major label - flattening the traditional hierarchical structure.

Echotape, who refer to themselves as the DIY Band, have been making a name for themselves with the help of social media, free apps and self-distribution platforms.

Their first video was filmed for £50 and their latest effort was all done on their smartphones.

"When we started out we realised we were going to have to do everything ourselves because we were not going to get straight away the major label backing and financial help," drummer Mike Burford told Sky.

'DIY band' Echotape made a music video for £50 uisng their phones

"So we all saved up. We bought an iMac, we got UADs (cards for running audio plugins), Genelec speakers, that get you the top quality sound that we need for recordings. We don't have to keep paying out for going to studios."

Bass player Dan Morris added: "For our most recent video we did all our filming on an iPhone, so we can just plug it straight into a computer and put it into Final Cut to edit out.

"In the past we've taken photos from Instagram, projected those onto us, filmed that with our phone then edited it together.

"It's so easy and so cheap. All you need is your phone and some software to edit on your computer, then you can whack it straight on YouTube or put clips on Instagram or Vine."

With more and more artists recording at home and using self-distribution platforms to share their music directly with fans, many are asking what the future holds for labels and whether bands can make it without them.

Universal's head of digital says traditional labels can still help artists

Paul Smernicki, director of digital at Universal Music UK, told Sky News there's still a lot the labels can add.

"There's no doubt that it was extremely destructive for our business. We had something that was easy to copy immediately and distribute vastly at the flick of a switch," he admitted.

"No doubt it was damaging for a while, but we're in a position now where I think it's a really exciting place to work.

He added: "We're definitely not dead. I think there is still a huge amount that we add, there's the whole A&R (artists and repertoire) process - you can get your song on iTunes, but can you get your song on radio?

"There's skills and things we can bring to the table.

"I think artists would vote with their feet if we were redundant and not required, and it's a very healthy competitive landscape for signing acts."

In order to compete with the self-distribution platforms giving artists direct access to iTunes and consumers, Mr Smernicki said Universal had launched its own service in Sweden, enabling artists to be "streamed into the label network" too.

With major labels joining the revolution rather than fighting it, there's little doubt that the traditional roles of manufacturing, distribution and retail will continue to be debated and redefined.

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