Paper 'n' CD gimmicks won't destroy industry

A few months ago, the head of a major Irish record company compared going to work these days to clocking on at the Alamo. The music industry was under attack, he said with a huge sigh, and the bad guys were coming at them from every angle.

There was the Internet and its squadrons of illegal downloaders. There was piracy and its links to paramilitaries, gangsters and Osama Bin Laden. There were copyright challenges and no-good liberals in Europe seeking to change archaic laws. He didn't say anything about the awful music he and his fellow labels have released in the previous 12 months, and we were too polite to bring that up.

Then, he said, there are the free CDs you get with the Sunday newspapers. He paused for effect. They're the real kick in the teeth, he said, the final nail in the coffin and any other disaster cliché you want to use.

Sunday mornings must be particularly stressful for your average music industry big kahuna. When he or she walks into a newsagent to pick up the Sunday papers, they join a queue of people at the checkout clutching CDs, which the music industry would have preferred to flog rather than see given away free of charge with various newspapers.

There are few Sunday or daily newspapers that haven't succumbed to the lure of using

a free CD or DVD to boost circulation. Indeed, it has become so much the norm with monthly magazines that you feel short-changed when there isn't a free CD glued to the cover of whatever magazine you're purchasing.

In the music mag market, where dips and slumps always outnumber rises and gains, Uncut has just recorded their 11th consecutive rise in circulation. While the likes of Q and NME have fallen from their once mighty sales perches, Uncut still keeps on selling. It's perhaps no surprise that Uncut always features a free CD, proof maybe that free CDs do some- times perform circulation miracles.

In the same week that Uncut announced it was now flogging nearly 113,000 mags every month, there was an attack on the giveaway CD practice by the Music Managers' Forum. "Music is valuable and you should be willing to pay for it", said MMF chairman John Clover. "But the message you get from a news- paper is music is free and it devalues all of our artists' catalogues. It's madness."

Despite the corrosive effect of these free CDs on their revenue streams and back-catalogue, the music industry is quite happy to deal with the newspapers and magazines when they come a-calling. After all, the papers aren't just pressing up CDs without asking anyone first.

The compilation of each CD involves a licensing process, which normally involves the payment of mechanical royalties, a fee destined to make its way eventually, less many percentages here, there and everywhere, to

the artist and the artist's manager. The money is coming in (albeit

in dribs and drabs), so, hey, whaddya gonna do?

Such short-term thinking is rampant right now in the music industry. Those who take a long-term view are pushed aside as the panic for immediate financial fixes grows worse and worse. Mergers, acquisitions, layoffs, cost-cutting, ringtone charts, TV pop bands, dropping unfashionable acts, returning Simon Cowell's phone calls: the music industry has become fixated with what will put a shine on this quarter's balance sheet and what will keep shareholders happy. It's as if the industry doesn't see a future beyond the next 12 months.

It's ironic, then, that such lack of foresight comes at a time when music sales are actually rising. Album sales are up. Sales of singles, the format the industry has told us to forget about, are up for the first time in five years. Music DVDs and legal download sales are also on the rise. Maybe it is down to free CDs with the Sunday papers. Maybe it's thanks to cool new albums from Joss Stone or Franz Ferdinand. Maybe it's people buying CDs to rip onto their iPods and digital players.

Whatever it is, you can safely conclude that it has nothing to do with bloody ringtones.