What if tech companies ran the music business?

There was some talk a few months ago about whether or not certain large technology companies should consider buying up chunks of the failing music industry in order to get around the regular headaches of such things as licensing and access to content. Since then I’ve been wondering how this might actually work in reality and whether it would really benefit the acts themselves, as well as the listening public.

The first thing to consider is that – if any one of these large tech companies were to purchase a major label or even take the brave steps of setting one up themselves – it would not, either at first or likely ever, be part of their core business. The past has some interesting lessons to teach us about organisations who have run music labels alongside other businesses, such as the case of EMI and The Sex Pistols.

The label signed the band in October 1976 for a two-year deal but trouble soon followed, most memorably the band’s behaviour on the Today programme on December 1st that year – the fallout from which cost EMI a major manufacturing contact and forced them to drop the band to preserve their reputation as a manufacturing company as well as music one. In this case, EMI had experience of dealing with artists going back forty years and were still unable to contain the chaos caused by their hot new signings – one can only wonder how Apple would deal with an internal crisis like that.

The point here is one of expertise and knowing your markets – companies like Microsoft and Apple understand the best approaches around their existing products and services all too well but the music industry is something far more unpredictable and volatile than the technology market – essentially a gamble on public tastes and interest with risks far beyond the norm. After all it’s not possible for an Xbox or iPod to throw a TV (or even maybe itself) out of a hotel window or punch a photographer in the face and create an onslaught of negative publicity.

Would it really work?

In terms of what benefits there might be to the artists themselves it’s easy to imagine some kind of idyllic situation where music businesses are managed by tech companies like some exercise in philanthropy – essentially offering artistic freedoms with a blank cheque but I suspect the reality would we very different indeed. After all, existing record labels are used to taking huge financial risks in an often unpredictable market and allowing their artistic commodities some space in order to thrive but even with huge budgets to spare companies like Google and Microsoft would be likely unable to adopt a ‘hands-off’ approach when historically projects are managed in a very structured and often inflexible way.

A certainty of this imagined takeover of the music industry by tech companies is that music piracy would almost certainly be reduced as it’s inevitable that these organisations would build in every possible limitation and restriction to their platforms to prevent loss of revenue. In turn this could be beneficial for artists, especially if they were able to renegotiate their contracts to be more generous around percentages of music sales. However I feel innovation around music platforms would certainly flourish in this situation especially when you bear in mind that large tech organisations have already gone down this road and have always been keen to develop new means of selling and delivering music but have always been held back by licensing issues and the reluctance of music companies to embrace technology.

Regardless of whether the music industry finds itself being bought off piece-by-piece by technology companies or not, one thing is for sure – it won’t go down without a fight and if some of the new and existing platforms for music distribution such as iCloud and Spotify actually succeed in generating a strong new revenue stream for them, then the very technology companies that could hypothetically buy them out might end up actually being their saviours.