The future of the music industry

The mood around the Palais des Festivals in Cannes during the 43rd Midem was as changeable as the weather outside. One day, it was grey, drizzly, wet even, and it felt like the end of the music industry, but the next day, the sun came out and the mood was upbeat again. And, of course, the feel-good music of British artists such as Seth Lakeman, Jamie Cullum and Honey Rider, and French electro acts like Benjamin Diamond and Variety Lab, featuring a guest appearance by folk-rock stalwart Donovan, helped too.

Midem stands for Marché International du Disque et de l'Edition Musicale, a throwback to the days when all the industry had to worry about was pressing records and publishing music. The numbers of ways you can now access music has mushroomed, and the Nokia Comes With Music, Blackberry, and Guitar Hero stalls and booths were not far from British independent labels like Cherry Red Records and the Demon Music Group, while the Orange logo was around every delegate's neck and the devilish red Napster logo stared at the 10,000 attendees from every Midem bag. So much for "the devil is in the detail".

The days leading up to Midem's start on Saturday weren't exactly flushed with good news. The International Federation of the Phonographic Industry issued a press release estimating 95 per cent of all music downloads to be of an illegal nature, as if to better concentrate the minds of the delegates.

Figures from France showed that the country has the music market which has contracted the most, losing 50 per cent in value over the last six years. Spain has experienced shrinkage on a similar scale, mostly because of online piracy. Last year, Britain's music industry enjoyed a boom in singles sales – 115m units, mostly licensed downloads – but album sales went down by 3.2 per cent to around 133m units – not a bad result considering the doom and gloom in other markets, like the US. Just as well the Russians, the Chinese and the Japanese, along with the Scandinavians, were there to pick up the slack.

The Brits were out in force again in Cannes, despite the recession, despite the weak pound, despite disappearing profit margins. "You've still got to trade," said Nigel Elderton, the managing director of peermusic UK, the world's largest independently owned publishing company. Glastonbury Festival organiser Michael Eavis paid his first visit to the Cannes convention, and received the Green World Award, from Reed Midem CEO Paul Zilk, for his troubles. The staff of the UK collection society formerly known as the MCPS-PRS Alliance and now rebranded PRS For Music came mob-handed to announce their results and show off their new bright red plectrum-like logo at the Martinez, at one of the few events held at a hotel which is usually buzzing but was rather subdued this year.

Veteran managers like Peter Jenner – who looks after Billy Bragg – and Michael Eaton – who takes care of Eric Clapton's business interests – seemed and sounded like yesterday's men, and were rather overshadowed by the appearance of Brian Message, the co-manager of Faithless, Kate Nash, and Radiohead, and partner in UK management company Courtyard. Time and again, on panels and in one-to-one conversations, Message stressed the importance of the unique relationship between a band and its fans.

"Artists have to take up more responsibility for their own careers. I told The Rifles, after the gig, you interact with your audience at the merch stall instead of having a beer backstage. The results can be pretty impressive," he explained. Message and his partners learned a great deal from the digital-download "honesty box" release of Radiohead's last album and are keen to try new things with their other artists like Master Shortie.

"Radiohead is a trusted brand," said Message. "Once you drive that trust, you have a big opportunity. What Radiohead did with In Rainbows was not the blueprint for anybody else to use. It was the right thing for Radiohead to do at that stage in their career, on their seventh album. Labels are now one of the choices for an artist to have. You might want to bring them in as an investor but not to run your career. It's a long-term plot so you shouldn't have a short-term solution."

The Brits also provided much of the entertainment and talent on display at an event where music and the creatives are constantly fighting with the business side of things for attention. Seal, Duffy and Chris Martin all performed at the mime-fest that was the 10th NRJ awards on Saturday. The Coldplay singer appeared without his bandmates and banged the piano like a trouper during a version of "Lost", which contained a few duff notes, just to prove Martin wasn't afraid to sing live on a show France's main TV channel.

Donovan made the most of his time at Midem. On Monday, he was awarded the medal of Officier dans l'Ordre des Arts et des Lettres, by Christine Albanel, France's minister for culture and communication, prompting the thought that this most poetic of songwriters has not been a prophet in his own country. Seth Lakeman nearly stole the show from Jamie Cullum at the "British at Midem" concert with a rousing set, proving that his violin-driven folk can translate internationally. The earlier acoustic showcase provided an excellent opportunity for the London-based duo Honey Ryder. The media rather liked O'Mahony's "not quite femme fatale" blonde looks. Duke Special also played a fiery set.

It's the impromptu meetings on the Croisette or in a lift that make coming to Midem worthwhile. I bumped into Tom Silverman, the founder of the influential hip-hop label Tommy Boy, Richard Gottehrer, the songwriter, Blondie producer and founder of The and Andy Davies, tight-lipped about the imminent return of Jonathan Ross's radio show, which he produces. The movers and shakers of the music industry were in Cannes again. Most enlightening, though, was the conversation I had with Richard England, of Cadiz Music, who is currently involved in producing a documentary on Dr Feelgood, the seminal pub-rock group from Canvey Island, with Julian Temple directing. It has the potential to be as exciting as his takes on the Sex Pistols and Joe Strummer.

CANNES-DO ATTITUDE: MIDEM INSIDERS ON THE FUTURE

Michael Eavis - Founder of the Glastonbury Festival
"This is my first Midem and I got this green award. I'm very optimistic about the future of live music. People respond to an artist, they buy the records, or now the downloads and they come to the concerts. Live music, especially in Britain, is a very vibrant force. It's very attractive and it's good fun. I think for people in Britain, Glastonbury is good value for money because you can't afford to go abroad anymore – it's too expensive and there's the whole stigma about flying and everything. We're selling very well. After last year, obviously I'm thrilled to bits. I don't see the recession affecting the culture industry as such – it will probably help us a bit. Coming to Glastonbury is cheaper than going to France or Germany. I'm going to carry on until I'm 80 then hand over to my daughter Emily and the others on the team."

Brian Message - Co-manager of Faithless, Kate Nash and Radiohead
"I'm really optimistic about the future of the music industry. It doesn't mean it's going to be easy. The gravy train of the past is gone. It was a great production line, great returns, being able to buy copyrights and own them forever. Managers used to make 20 per cent commission for no investment. We have to accept that there's going to be a new way of doing things. Flexibility is the key. There are no rules anymore. The key word is value. Free music is a valuable part of the artist proposition. If we need to get into a market where we don't have a base, we can do something with free music to stimulate interest. Let's focus on that artist-fan relationship. But there's a myriad of choices out there. There's no one model any more. It's not easy. Everybody needs to be creative and come up with what they think is the best plan for their artist. "

Harvey Goldsmith - Managing director, Artiste Management Productions
"It's tough out there, nobody's denying it, but what do we do to get out of it? At MidemNet, the sister conference, the whole thing was all about the fan-artist relationship. How can new bands utilise the internet to help them break through? How does it all work for the fans? How do the fans hear about new artists and start to get involved with them? The new braves, Reverb Nation and Hot Spin, and all these new technology opportunities, basically help acts break through and help fans get to the acts. MidemNet showed the solutions are coming through. There are ways of connecting fans with new acts so everyone's gung-ho. The doom and gloom people, it's time they left and retired. Every day you wake up, somebody sends you a track to listen to or you hear about a band you go and see them live, you just get really invigorated and turned on by it. I'm working with Jeff Beck and I realise there's a whole new world out there for him. The industry needs more people to get turned on and stop moaning. I always feel there's a solution somewhere. We've got ourselves in a mess, now let's dig ourselves out of it and just get on with it. I feel we're going to have a great year."

Feargal Sharkey - CEO UK Music
"All of us have to grapple with a little thing called evolution which has a nasty habit of sweeping you aside as irrelevant should you decide not to cooperate. But the most important thing is the music. We know 63 per cent of 14- to 24-year-olds in Britain are downloading music and not paying for it but, on the upside, we also know they are passionate about music. It registers above mobile phones, game consoles, DVDs. Are young people going to suddenly stop wanting to be creative and make music? Are music fans going to stop enjoying music, wanting it as part of their lives? It's not going to happen. All the music industry ever did was provide a bridge between creators and fans. That bridge is always going to be there."

Alison Wenham - Association for Independent Music
"The British are good at internationalising their business – we only have 8 per cent of our sales in the UK. This industry has always lived with piracy. The supply chain has been disrupted by the demise of Pinnacle but the independent industry is mercurial. We don't like the duopoly, Sony and Universal, routinely controlling 80 per cent of the charts and the visibility, but I'm always hopeful. You've got to remember this industry has been going through an agonising decline for eight years. We haven't suddenly hit the buffers like the finance industry. So we are rather war-torn but we're also hardened and resourceful."