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|Articles - May 2014|
|Monday, April 28, 2014|
BY BRIAN LIBBY | PHOTO BY ANTHONY PIDGEON
Thirty-five years ago, Dave Allen participated in one of rock music’s biggest transformations, playing bass for the seminal British band Gang of Four as the punk and post-punk genres burst into the mainstream with a youthful, in-your-face attitude. Today Allen has become part of another music revolution, this time on the business side. In February he was named director of artist and music industry advocacy for Los Angeles-based Beats Music (a subsidiary of headphone manufacturer Beats Electronics), acting as spokesperson for one of the biggest emerging players in the business of subscription-based digital-music streaming.
If his journey from 24-year-old rocker to 59-year-old industry executive seems surprising, Allen sees a connecting thread. Success in creativity and commerce alike, he believes, comes from listening to and channeling the desires and passions of an incoming generation. “It’s about what springs from the bottom up,” says Allen, still thin and fit with a rocker’s gravity-defying hair, if a bit grayer now. In the past few years, Allen has written extensively about artists and new music business models — but his position on streaming puts him at odds with many musicians, who are critical of the so-far meager royalties being paid as listeners pay small monthly fees for unlimited access to songs. Fortunately, being a rock star has given him the confidence to thrive on confrontation; his vision of technology as enabling force has powered his ascension behind the scenes.
In 1989 Allen gave up playing in bands to found an indie music label, World Domination. The Internet was in its infancy at the time, yet Allen saw possibility. One of his label’s signed bands, Sky Cries Mary, was credited with performing the first live online concert broadcast. “I thought, ‘This is the future of music,’” he remembers. “Back then it was still a gamble. But you’ve got to take risks sometimes.” Next Allen became general manager of eMusic, one of the web’s first digital music retailers, before moving to Portland in 1999 to join Intel’s Consumer Digital Audio Services division. Over the next decade, he learned the marketing and advertising side of the equation at Portland firms such as the Overland Agency and North, often recruiting popular local bands to populate ads for clients like Deschutes Brewery and Cover Oregon.
Times have changed since Allen — who will remain in Portland while working for Beats — left the music business two decades ago. Since its peak in 1999, recorded-music revenue in the United States has dropped by over 60%, according to the Recording Industry Association of America. For much of that time, digital-music sales (the MP3 files we load to our iPods and smartphones) were seen as a savior, but last year they too declined for the first time since Apple launched its iTunes store in 2003. Meanwhile, digital-streaming services such as Spotify and Pandora, which provide listeners with access to thousands of songs for a monthly fee — they resemble a kind of customizable Internet radio — have experienced double-digit growth, which Allen believes will only rise.
“It’s not hyperbole to suggest that this generation’s music fans want to rent their music, not own it,” Allen wrote in a recent op-ed for London’s Guardian newspaper. “We can only look to what Internet and mobile users are doing or want to do, and then note how their actions drive technologists to provide platforms for them.” Not everyone is so enthusiastic. “You’re inventing this false economy,” says Portland’s Rebecca Gates, whose band The Spinanes gained international notoriety in the 1990s. “Streaming is benefiting the fans, which is great, but it’s not sustainable,” Gates says. “My music is a small business, and I like to be compensated for my work.”
The label that owns rights to her Spinanes albums, Sub Pop, makes them available to streaming companies, but Gates hasn’t allowed her solo work (which she alone controls) to be accessed. Reform is also needed in other parts of the music business besides streaming, Gates admits. In the United States, for example, unlike other countries, only songwriters and publishers earn royalties from their music being played on radio — not performers.
Allen’s counterargument is that artists need to make a leap of faith, and that today’s streaming royalties will grow exponentially if companies like Beats Music are given time to grow audiences. It’s a far cry from Gang of Four’s strongly left-leaning social commentary, declaring “blood war on the bourgeois state,” as one of its early songs goes. But his dual experience on music’s creative and business sides gives him credibility, industry watchers say.
“There’s an understandable tendency for musicians involved in the streaming debate to respond defensively, worried primarily about protecting their revenue streams,” says writer Kevin Dettmar, whose book-length treatise on Gang of Four’s landmark 1979 album, Entertainment!, was released in March. “But Dave can combine his experience as an artist with his smarts as a policy maker. It’s a killer combo.” Time will tell how lucrative streaming will become, either for record companies betting millions or musicians making pennies. Driven by the chance to be part of the conversation and to crusade for change, Allen sees his move into streaming advocacy as a natural intersection between his music, marketing and tech experience.
As recently as two years ago, Allen admits, he was still skeptical about the format. His students at the University of Oregon, where he teaches digital brand strategy, changed his mind. “I start off every term asking them to give me their top five ways of accessing music. And it’s the same every time,” he explains: Students overwhelmingly listen for free on YouTube, which acts an introduction to new music. But streaming has become their second choice, and the first they’ll pay for, affirming Allen’s belief that within 10 years, it will reverse the recorded music industry’s multi-decade decline.
“Plenty of consumers will continue to buy MP3s, vinyl records and CDs,” he says, “but I also believe we’ve reached a tipping point.” In the next decade, a new generation of users will come into the system who never knew anything but digital music, Allen says. “We’ve got to get growth and scale to make streaming profitable.”
The former rock star turned industry executive concludes on a more fatalistic note. “Ultimately, it’s up to the users. What do the users want?”
Friday, October 24, 2014
How does your workplace stack up against competitors? How can you improve workplace practices to help recruit and retain employees? Find out by taking our 100 Best Companies to Work for in Oregon survey!
Thursday, November 20, 2014
BY JASON NORRIS | OB CONTRIBUTOR
Each month for Oregon Business, we assess factors that are shaping current capital market activity—and what they mean to investors. Here we take a look at two major developments regarding possible rollbacks of the Affordable Care Act (ACA).
Wednesday, October 22, 2014
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A conversation with Majd El-Azma, president and CEO of LifeWise Health Plan of Oregon, followed by the Healthcare Powerlist.
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Tuesday, December 02, 2014
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A conversation with attorney Erich Merrill about the latest way to raise money from large groups of people.
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Meetings get a bad rap. A few local companies make them count.
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BY OB STAFF
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