BOSTON -- There appears to be little doubt the Internet is having a profound effect on the music industry.
But what's unclear, at least to the industry veterans who were here Thursday to discuss "Change, Challenge and Opportunity" in the record business, is what that effect is, and whether it should be welcomed.
The Net is "creating problems for major distributors, and it's creating problems for publishers, lawyers and retailers," V2 Records president Dan Beck said. "But anytime there's problems, there's also great opportunity. I think it's the next whole phase of this business."
To test that opportunity, V2 -- home to such artists as Mercury Rev, Stereophonics and Moby -- recently offered the latest Underworld single as a free MP3 download for 24 hours. Within 40 minutes, Beck said, the company's server had registered 450,000 hits.
But John Carter, who manages singer/songwriter Paula Cole, sounded a lot less sure of the Internet's potential. Carter, a veteran who signed R&B singer Tina Turner and classic rocker Bob Seger during his stint at Capitol Records, said music on the Internet is simply "there," and nothing replaces the joy of receiving a tangible product, packaging and all.
"I'm just not convinced that people are going to sit at their computer terminals and think that music is going to be a big thing," Carter said. "I realize it's something -- but I also remember the big scare when everyone was going to tape things onto cassette.
"The computer is the real answer," he continued. "Computers have changed everything. The Internet, though? I'm just not convinced."
Carter and Beck were on a panel at the famed Berklee College of Music. The panel also included Sandra Trim-DaCosta, senior vice president of N-Coded Music, Boston-based entertainment lawyer Mark Fischer, jazz musician Marcus Johnson and Dan Stoper, chief executive officer of Putumayo World Music.
Johnson was enthusiastic about the Internet, saying it "allows artists to be in touch with their audience. It's opening up relationships with artists and fans. We have a long way to go ... but I think the Internet is the single most incredible thing to happen to communications ever."
Johnson, who has a business degree from Georgetown University and maintains his own website (www.marcusjohnson.com), continued: "You have people like [The Artist Formerly Known As] Prince, who's distributing things via the Internet. And he'll send you a file of his packaging, which you can print on your color printer. You can go to Staples and Tower and buy your jewel case, and put it together with a [recordable CD], and there you have it -- you still have that three-dimensional touch."
The panelists also discussed corporate mergers, including the PolyGram-Universal alliance that combined such labels as Interscope, Geffen, Mercury and Island. That merger resulted in layoffs and roster cuts.
"I think it's extremely lucky that all those people got fired," Carter said. "In general, the industry needed to lose 30 percent of its people. I think there were too many A&R people, and they all thought they were signing the next great act. There aren't that many great acts."
Turning his head towards the audience -- mostly music-management majors -- he said, "I'm sorry; I hope you all make it. But only a few acts make it."
Beck, meanwhile, said he hoped the merger would give V2, whose records are distributed by BMG, an opportunity to pad its roster.
"We put together a team to look at what could get dropped," he said. "But nothing was happening."