As listeners continue to move away from the classic sales model to a "time spent listening" performance model, we hope Chairman Genachowski will also demonstrate a respect for Intellectual Property and by extension the need for artists and labels to be fairly compensated for the works they create when those works are used or recreated.
With the losses of manufacturing and service industries from the U.S. economy, the importance of protecting and promoting music is ever more important, and especially during these difficult economic times, we believe protecting Intellectual Property, and the ability of artists, musicians, songwriters, labels, and the entire community of independent music-makers must be a top priority for the U.S. government.
Certainly, the music industry's economic difficulties pre-date our current national economic crisis. But despite shifts in how fans find and consume music it remains a fact that music resonates in people's lives -- and is central to the culture -- as much as ever. As the central voice for independent music labels, we at A2IM are encouraged that independent music is a growing share of the music industry.
People want independent label music! We've seen this in many ways. For example, according to the non-profit performance royalty collection society SoundExchange -- who's mission is to track and collect royalties from non-terrestrial broadcasts like webcasting, satellite radio, cable & Direct TV -- almost 40% of audience impressions for non-terrestrial broadcasts are from independent music, a telling statistic when you consider that these sources are almost entirely programmed to the specific tastes of individual listeners.
In the old terrestrial and bricks and mortar marketplace, access to music has long been -- and continues to be -- limited by the high costs of promotion and the decisions of gatekeepers. The result is tightened playlists skewed toward oldies, and a minimal number of overly repeated megahits. It's no surprise that at AM/FM radio independent artist and label music audience impressions consistently remain under 10%. But when you leave the decision up to the fans, the demand for independent music increases dramatically. Similarly, retail shelf space is controlled by those who can afford expensive advertising programs with a few big box retailers, a far cry from the new paradigm of wide open and inclusive digital retailing. Due in large part to these digital sales, in just the last year independent label market share grew from 29.49% overall (and 34.67% digital) in 2006 to 31.76% overall (and 37.16% digital) in 2007.
This growing independent label success story is rapidly becoming a leading example of the vibrancy independent music brings to our culture and our world, as independent labels produce music from a wider variety of music genres and a more diverse collection of artists.
As Thomas Friedman of the New York Times famously wrote in his 2005 book of the same name, the world is now flat! Everyone who embraces the digital model now has access to a global market and can compete. Intellectual Property in general, and music specifically, are big contributors to our economy -- and to our culture. Making certain that open and fair access to market is maintained while supporting fair compensation for the use of music is the worthwhile and achievable goal. At A2IM we're proud to welcome our new FCC chairman, and call on him and and the incoming White House administration to support all of us striving for a more vibrant, more diverse, and more fair atmosphere for independent music.