Musicians turn to tech-savvy audience

Kate Nash first found fame on MySpace. Photo / Richard Robinson

Musicians and managers are turning to BlackBerry phones and YouTube videos to solve a problem that just won't go away: illegal downloads of digital tracks.

At a time when 95 per cent of music downloads are pirated, with few signs it will let up, artists are finding alternative ways to profit from music online, sometimes bypassing music companies such as Universal Music Group, Sony BMG Music Entertainment, EMI Music and Warner Music Group.

"YouTube is a conduit between artists and fans," Brian Message, the co-manager of Radiohead, Faithless and Kate Nash, said at the annual Midem gathering of music executives in Cannes, France, this week. "These days an artist can be a global brand and record labels are no longer the only option."

Digital music sales via the web and mobile phones climbed 25 per cent to US$3.7 billion ($7 billion) last year, a fifth of the global market, the International Federation of the Phonographic Industry (IFPI) said last week.

Handset makers are providing a new source of revenue for artists by signing deals with music companies to boost sales of smartphones that can download tracks legally online.

Artists can also get payments from YouTube for hits on their videos.

"Because of broadband, wireless and the internet in general, consumers are much more empowered to seek out the music and media they are interested in," said Aram Sinnreich, co-founder of music industry consulting firm Radar Research in New York. "The reality is there isn't going to be a single business model."

Most music will eventually be accessed over smartphones such as Apple's iPhone and Research In Motion's BlackBerry, said Terry McBride, who manages Sarah McLachlan and Avril Lavigne.

"The smartphone is changing the music industry because of its platform and I predict most consumption of music will be through a smartphone in the future," McBride said in Cannes.

Total shipments of smartphones, which have computer-like capabilities allowing fast music downloads and internet access, grew 12 per cent in the third quarter to 36.5 million units, accounting for more than a tenth of total mobile phone sales, according to researcher Gartner.

The music industry will be increasingly managed online, without the main backing coming from record labels, according to music managers at the conference. That includes online ticket sales, getting per-play licensing payments from YouTube or creating personalised music websites on MySpace Music.