Overheard At NARIP

SAN FRANCISCO (Hypebot) – The National Association of Record Industry Professionals (NARIP) had their monthly Biz Brunch recently to bring together industry producers, songwriters, and publishers to network and discuss trends. We've covered NARIP before, and this month's New York meetup hosted at Rockamedia has had a lot to talk about.

"Music distributors won't last much longer if they don't innovate. I don't see them lasting against online retailers and more profitable independent labels. I can understand clouds as a storage for music working but it will be interesting to see if they work for streaming. Everyone already has the music they want stored locally on their devices." said Corey Lee of amtmp.com. It's a valid argument, just as Best Buy is preparing to enter the streaming music market. Their strength is in their brick and mortar distribution chain – so how can they possibly compete?

The answer is 'social'. And Apple knows that. Back in October 2010 Hypebot reported on how Twitter and iTunes Ping were teaming up, and just last week Apple announced native Twitter integration throughout OSX Lion. This innovative move means for the first time social music sharing will now be system wide on all apple computers. But at the heels of Apple's innovative iCloud service and Twitter/Ping integration, we're also learning that Spotify is gearing up for a presumed July launch in the United States. This will bring music lockers head-to-head against music streaming.

The overall trend is that 'social', along with touch-interfaces, are not only dictating how we buy items online and off, it's also changing every aspect along the chain. "I think it's going to be more about creating a partnership with the bands, rather than locking them down into a contract." says Rockamedia's Samantha Watson "Music will be even more social, because now the fans follow everything about the artist – not just about their music. Major labels are concerned about the music sales, but music sales are just a tiny part of the picture."

And this brings up a good point. Amazon's 99 cent Gaga deal showed us that music is a powerful loss leader to bring people into a lucrative ecosystem – similar to how bands give their music away so they can make money up on tours, merchandise, publishing, etc. So will music's trend as a loss leader change with cloud storage, or even streaming? No one knows for sure, but online music stores and music streaming are serious business – signified by Pandora's landmark IPO.

Everyone wants to profit, but one of the often overlooked markets for music revenue is publishing and licensing. Joanne Onofre says "Music licensing is the future. Music libraries will be how bands make money." But while some bands use publishing as a revenue model, others license their music for free in order to get publicity and be seen.

It's a risky bet. Hit games like Rock Band aren't around any more, yet 2 years ago they were huge. "Music and social networks are the modern day MTV" informs John Martin of Rightsflow. He has a point – no one is sitting in front of their TV's any more. One trend worth watching is not just how more people are sharing their music, but how more are buying music legally. "Music downloads have room to grow. They're successful because they make stealing music look difficult" Martin said, "Social trends and sharing music will soon be monetized." – Walt Ribeiro

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