Well, it all started off so affably - the music industry and the commercial radio sector have a thirty year partnership that has proved profitable for both parties, the digital world offers a whole host of new possibilities, and with a bit of work the two industries can profit even more in the future. On that everyone agreed, as music and radio types met for last night's MusicTank Think Tank event in London.
"We might both moan about each other a lot, but the relationship between the music and radio business in the UK is, generally, a good one", observed keynote speaker Phil Riley, CEO of Chrysalis Radio, having assured everyone that the commercial radio industry was in good health. "Moving forward there are lots of new possibilities from our relationship, and as the music industry recognises that CD sales may stagnate or even decline, it is as important for the music industry to capitalise on those possibilities as it is for us in the radio business".
"The challenge is how to make these new possibilities work. Here we need some collaboration. The radio industry is prepared to invest in the new platforms that the digital age allows, but we need the rights holders' help, so that we can both benefit in the future. We don't want their money, just realistic expectations when it comes to the royalties we pay for playing their music on our new digital services".
"The new digital radio stations are a good example of how this can work. When we established the first digital only radio stations, the music industry reluctantly accepted the traditional revenue split model of royalties, even though these stations weren't going to have much in the way of revenues at launch. But that acceptance will pay off for the music industry - because it has enabled us to get these new stations off the ground, so that now we are able to go out and get advertisers and sponsors - who will give us the revenues to share".
This need for the music industry to accept what will probably seem a poor deal in the short term to help the radio sector develop its new digital ventures, based on the promise of new revenue streams in the future, was one of the key themes of the debate. As I said, it all began quite affably. The music industry - whether it be publishers, record labels or their appointed royalty collection bodies - seem to accept that royalty payments from radio are an increasingly important revenue stream, and that in order to grow that revenue stream they have to help the radio industry maximise on the potential of digital technology - mainly by accepting poorer royalties in the short term (mainly by accepting a revenue share model, even when revenue potential is poor) on the promise of bigger payments in the future.
The problem, however, comes when the digital ambitions of the radio stations start to get into an area that the music companies see as being a little too close to retail.
"In the old days things were much easier", panellist Tony Clark of recording royalties body PPL explained. "You had the mechanical world, making money for the record labels by selling CDs, and the broadcast world, making money for the record labels by paying a share of advertising revenue sold on music radio. But in the digital age you have convergence - broadcasters are moving into the mechanical space, and they may come to dominate that space, that is when things get complicated".
This convergence comes when radio companies start providing music programming on demand, via online streams or as podcast style downloads. Here the radio companies are potentially competing with what Clark calls the 'mechanical world', which in the digital age means the download platforms.
The logic from the record label viewpoint works like this - if people can access a one hour music programme containing 15 tracks via a radio station website, which they can listen to on demand, and possibly transfer to an iPod and edit according to their musical preferences (even if the transfer and editing is done non-legitimately), then why will they then go to an iTunes type platform and buy those 15 tracks? If the record label is losing the sale of 15 tracks, it will need to recoup that money through its share of any subscription or advertising money the radio station makes through the distribution of the programme.
The logic from the radio station viewpoint works like this - what if the largest amount of profit the radio station can expect to make from the programme (from advertising or subscription) is 20p, but now the record label wants 20p for every one of the fifteen tracks featured? Clearly that's not going to work.
And so things start to get complicated. "Clearly there are certain digital models which are different to conventional broadcasting - non-linear services - like radio stations selling downloads of the tracks they are playing," Riley continued, "those a new business models and they need new licensing models to work for both parties. But some of the services that radio stations might want to consider are essentially a development of our old business model - and for those services the old [mainly revenue share] licensing model should be able to be adapted. To be honest, if it can't these services are never going to get off the ground".
And there lies the biggest issue in this debate. Some digital services should operate via the old revenue share model that the broadcasting industry has come to depend on, but some digital services will have to operate on the per-track licensing model that the record labels have offered the download companies. That isn't contentious (actually it is, some people say the distinction is a false one, but let's not dwell on that for the time being) - the contentious bit is what kinds of digital radio services are old model, and which are new. At what point is a radio station actually a download platform in all but name?
Riley began by pointing out "the devil is in the detail". This dividing line between broadcasting and downloading is the detail where things cease to be so affable between the music and radio sectors. And it is detail that is seemingly some way off being sorted.
Don't forget, you can read CMU's interview with Phil Riley on all things digital radio at http://www.cmumusicnetwork.co.uk/interviews