By Bruce Britt
En route Friday to attend the Entertainment Law Initiative Luncheon at the Beverly Hills Hotel, I had to keep reminding myself that it was February. Sure, this is California and all, but even by L.A. standards it was a stunning day. Sunny, mid-70s, the air literally reeking of blossoms. Beautiful.
But beauty can be deceiving. In 1999 the GRAMMY Foundation hosted its first annual ELI Luncheon. Back then, the recording industry was near the peak of its glory, with best-selling albums by Radiohead, Erykah Badu, Backstreet Boys and Shania Twain happily cohabitating on the world’s album charts. Beautiful.
Mere months after that inaugural luncheon, the arrival of Napster and online piracy would begin to significantly erode recording industry profits.
Considering all the above, it seemed fitting that the keynote speaker at the 14th annual installment was Spotify co-founder Daniel Ek. Ek's role is to guide the vision and strategy of the music streaming service, which was introduced in the United States last July. While Spotify now boasts a growing subscribership of more than 10 million users worldwide and is seen by some as a legitimate alternative to piracy, the service’s payment structure has been called into question by some artists and industry professionals.
During his keynote, moderated by Bloomberg Businessweek Editor-In-Chief Josh Tyrangiel, Ek insisted Spotify is to help save music, not to bury it.
"At the end of the day, I want the music industry to be larger than what it is today," said Ek said. "And I believe that [streaming and sales] can co-exist side by side."
Ek supported his claims by noting that 70 percent of Spotify income is paid out to artists, and he predicted that streaming sites such as Spotify will soon provide as much revenue to the labels as Apple's iTunes. But Ek's crusade is proving to be an uphill climb. Acts including Coldplay, Bob Seger, Metallica and Red Hot Chili Peppers have held back all or parts of their catalogs from Spotify. In an ironic twist, MusiCares 2012 Person of the Year Sir Paul McCartney just days ago ordered that some of his solo catalog be removed from Spotify.
In the end, attendees Friday could only wonder if Spotify will be the savior Ek claims, or yet another beautiful calm before a devastating storm.
Renowned music attorney John Branca helped provide perspective. Accepting the ELI Service Award for his achievements representing legendary acts such as Michael Jackson, the Beach Boys and Carlos Santana, Branca spoke in an authoritative voice that veritably hushed the hotel's Crystal Ballroom.
"It's a popular belief that the music industry as we have known it is over," Branca said. "I'm sure Daniel would disagree with that."
But just minutes later in his acceptance speech, Branca would put the tumult of the past decade into magnificent context.
"This is a business of passion," he said. "Today, I still continue to be impressed by young people who want to come into the music business … people still cling to this business because for them, they can't do anything other than want to represent great artists who enhance our lives, and oftentimes change our culture."