The cold water hit with a splash when the music industry man threw it on the MP3 party.
Lawrence Kenswil, president of global electronic commerce and advanced technology for Universal Music, one of the "Big 5" record labels, gave a daring dose of his version of economic reality to the MP3 Summit.
"Artists don't need record companies, and they can go direct to the people," Kenswil said, citing what he saw as one of the dubious postulates of the MP3 movement.
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"Well, without marketing and promotion, I think the artist will have an experience closer to the street corner performer, rather than the stage performer."
In a speech debunking such a notion, Kenswil outlined his predictions for the era of digital, downloadable music.
He bore straight into the notion that music should be given away, while artists would make money on things like T-shirts and concert tickets, which was one of the themes in John Perry Barlow's opening keynote speech.
"That's fine, I'm all with that, as long as the owner of the music makes that choice. Personally, I think it would be a moronic choice, but that's up to the owner."
In general, Kenswil said a fundamental aspect of today's music business won't change: The artists have to get paid for the music they make. "Creators want to be paid, or generally they won't create."
He said he'd leave it up to the audience to "think up all the reasons record companies will die." According to his vision of the future, record companies won't die, although things will change radically.
The transition to digital distribution is inevitable, Kenswil said. As that happens, marketing to the consumer must change. "The kind of marketing that succeeds is the kind of marketing the consumer wants.... They want to be marketed to in ways that expose them to more music that they like.
"There will be download buttons everywhere," he said – on the radio, on MTV, and in record stores. "I hope there will be download buttons in airports."
Kenswil also took a stab at the sacred medium on which MP3 is riding: the Internet. The Internet, he said, is simply not a network capable of replacing the current distribution channels for delivering music to consumers. There's not nearly enough bandwidth.
To meet the record industry's current distribution rate of 30 million albums per week, the Internet would have to move 15 million gigabytes per week, equivalent to the amount of data contained on 30 million CDs. He cited estimates of the current data transfer over the Net at 250,000 GB a day – or 1.75 million GB per week – as proof that the Net couldn't deliver.
Some in the audience weren't buying it. Independent audio consultant David Weekly said that Kenswil's speech was riddled with holes.
"It's beyond bullshit," Weekly said. "To try to shatter the illusion of Internet music's promise, Kenswil was completely misrepresenting bandwidth, caching, and other properties of the Internet that make it a perfectly viable medium for music delivery.
"He used some very simplistic math to explain why the Internet was wrong," Weekly said.
Jeremy Nusbaum, vice president of business development for MP3-2000, an MP3 information hub on the Web, said that Kenswil glossed over many of the reasons artists are dissatisfied with the recording industry and eager for a better economic model for distributing music.
"These people are a multibillion-dollar industry for a reason," Nusbaum said.
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