- Sean Parker – co-founder of Napster, backer of Spotify – is suddenly very bullish on the old-school record label business.
- He believes the distribution system which he helped to break is “on the verge of being fixed”, and that now is the time to invest in music again.
Appearing onstage alongside Yuri Milner of DST and Niklas Zennstrom of Skype/Atomico at the e-G8 conference Paris, Mr Parker explained his ultimately unsuccessful scheme to contribute to a consortium bid for Warner Music, sold earlier this month to Len Blavatnik’s Access Industries for $3.3bn.
“I think that there is a pretty dramatic change in the way music is monetised that is on the cusp of happening. Back catalogues of record labels are going to become extremely valuable,” he said, just as music publishers’ back catalogues have become more valuable.
“If you believe this transformation is occurring, if you believe the broken distribution systems are on the verge of being fixed, those recordings are dramatically undervalued.”
As people build libraries and playlists, they start subscribing to take that music on the move. Many are still sceptical about Spotify’s business model, but Mr Parker believes it’s a “dramatic paradigm shift” in consumption that “implies the traditional music companies are undervalued”.
“In the last 10 years we have presided over the greatest destruction in value in the history of the music industry,” he said, with a formerly $45bn industry “brought to its knees” to today’s $12bn worth. “Assuming we can stabilise things and restore growth, it shouldn’t be that difficult to preside over the greatest increase in value in the history of the recorded music industry.”
Speaking with perhaps surprising coherence, given his lavish party the night before, Mr Parker was also (inevitably) asked about how his public profile has changed since his portrayal by Justin Timberlake in movie The Social Network.
He said he was “abused and maligned”, largely by the internet media, which created a “caricature of me”.
“It was slightly surreal that I had had my entire identity commandeered by the blogosphere, coupled with Twitter and Facebook,” he explained. “Here I am, the greatest beneficiary of this transformation and also one of its greatest victims. The knee-jerk response would have been to withdraw. There were times when I tried that. I realised my only salvation was to embrace the mediums, be more transparent and be more public and create a dialogue that was truthful.”
He continued: “All the press coverage of me for three years was entirely fictional. Yet at the end of the day, having more people reading interviews and paying attention to my Facebook page gave me control over my identity. These mediums are only destructive to privacy if you opt out of them, if you choose not to use them to your advantage.”