Ian Rogers' Digital Music Manifesto

Ian Rogers speaks Thursday in Seattle.

Big companies that put themselves between artists and fans, without providing real value, risk becoming obsolete in the age of digital music. And if they can't adapt, forget about 'em

That was the message today from Ian Rogers, 36, the former Yahoo! Music director who heads the Topspin media technology company. Rogers spoke at the Grammy MusicTech Summit in Seattle -- describing an emerging "middle class" of artists, discussing the latest in music marketing, and explaining why Apple has, so far, run roughshod over Microsoft in digital music. Read on for excerpts from his remarks.

On the big record labels: "I'm really sick of reading everyday that the music industry is falling apart because the top-line revenue of four companies isn't what it used to be. I really think it's a myopic way of looking at the music business. ... Continuing to look at the music industry through this lens, it's as if, in 1990, we were all, you know, crying about cassette sales declines. It's really ridiculous. ... The physics of media have changed, and as a result, it's really ridiculous to think that the winners, or even the definition of success, will remain constant.

On the human need for music: "People are consuming more music than ever. You've got iPods up 60 percent year-on-year. P2P file sharing is up. Audio streaming is up. But people are also willing to pay for music. Radiohead's pay-what-you-want model, it was ridiculous, people coming out and saying, 'Oh, a lot of people didn't pay for the Radiohead record.' Well, of course, but a lot of people did, actually. ... People are willing to pay for a connection to the music they love. That's for sure."

On the connection between artists and fans: "Think about perspectives that matter. The artist, and the fan. I was on a panel last week in London at Musexpo and I listened to my friend Rob Wells from Universal Music Group talk to a gentleman from Nokia about Nokia's Comes With Music for half an hour, and I was just sitting there thinking, these guys could talk for an hour and not mention music, an artist or a fan. You have a company with a catalog and a company with distribution talking about the deal they did together, and as a music fan, and somebody who cares about artists, it doesn't really speak to me."

On Apple vs. Microsoft: "When the technology is not yet good enough, the integrated solution always wins. So, to me, when you're looking at the dominance of Apple in digital music vs. our friends here at Microsoft, to me that's exactly what was going on. If you're going to run the race of a completely integrated stack -- when the technology is clearly not yet good enough for the average consumer -- of Apple running the media player, the store, the device versus Microsoft's operating system and DRM plus MusicNet's middle-tier layer plus Yahoo's software layer plus a device by Samsung or iRiver, it has a very predictable outcome. At the same time, there is a point always at which the technology overshoots what the consumers need ... and disintegrated solutions become more powerful."

On the role of 'permission marketing' in Topspin's work with David Byrne and Brian Eno: "It's not rocket science -- if somebody's a David Byrne fan and David Byrne sends them an e-mail, it definitely actually works. You can see a large percentage of our sales came from that channel. The next most interesting thing was how much search-engine optimization and search engines drove in the process. I think this is really key to somebody who is trying to manage their online business." (Note: Spelling of Eno's name corrected since original post.)

On translating interest into sales: "We had this streaming player that could go on any site on the Internet, and it went some interesting places. Whether it's a blog ... or right on MSN. ...  It was great for us because we have tons of data now. I know how many people looked at that page, how many people clicked play, how long did they listen, did they click through to buy, if they did, which package did they buy. And when you pull that together with all of these, literally, hundreds of channels, you get a lot of interesting data about your sales channels. I mean, I can tell you the relative value of Boing Boing vs the New York Times. Your PR person probably can't tell you that."

On the rising middle class of artists: "I know what you're saying, though. ... 'That's great for all these artists who've had the benefit of major-label promotion for the last 25 years. What about the new artist? There's definitely a certain amount of validity to that. It's really hard to get above the noise, and I'll argue actually that one of the only ways to get above the noise, really, is through these limited distribution channels. ... There's certainly a new middle class of artist who's growing up, and success means getting paid to make your art, not getting on the cover of Rolling Stone."

On the shift in the industry: "Just ask yourself, what are we talking about here? Are we talking about the artists? Are we talking about marginal profitability for artists? Or are we talking about a change in business model for these companies that are in-between artists and fans? Because, honestly, to change your business model for companies that are between artists and fans? Who cares. That's up to those companies to adapt. Nobody felt sorry for Digital Equipment Corporation when the personal computer came along and changed the value proposition. It's exactly the same thing that's going on here."

Concluding remarks: "Any of us, myself included, that are not either the artist or the fan, are just potentially in the way. So it's on us to provide value. To provide real value. And that's fine with me. I'm very happy to say, OK, my company has to provide real value. My company is not about lock-in. It's not about me owning your masters. It's about me providing value to you, and if I can't, well, then I should get the hell out of the way. So I really encourage you, when thinking about the music business, to think about marginal profitability for artists first and foremost, and to think about the companies that enable that, and to forget about the ones that don't."