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Forrester: Getting out of the digital music impasse | MidemNet 2011 Presentation
 

Forrester: Getting out of the digital music impasse | MidemNet 2011 Presentation

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The full "SPARC" presentation given by Mark Mulligan at MidemNet 2011, in 3 parts: ...

The full "SPARC" presentation given by Mark Mulligan at MidemNet 2011, in 3 parts:

1. Why digital music has lost its mojo
2. Digital downloads: the transition technology
3. SPARC: the ingredients of future music products

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    Forrester: Getting out of the digital music impasse | MidemNet 2011 Presentation Forrester: Getting out of the digital music impasse | MidemNet 2011 Presentation Presentation Transcript

    • Getting Out of the Digital Music ImpasseMark Mulligan, Vice President, Research DirectorJanuary 22nd, 20111 © 2010 Forrester Research, Inc. Reproduction Prohibited 2009
    • AgendaWhy digital music has lost its mojoDigital downloads: the transition technologySPARC: the ingredients of future music products2 © 2010 Forrester Research, Inc. Reproduction Prohibited
    • Digital music is at an impasse3 © 2010 Forrester Research, Inc. Reproduction Prohibited
    • Music products Paid downloads don’t yet meet don’t translate well consumer outside of the demand iTunes ecosystem License structures are disadvantaging the formal sector at the expense of unlicensed services4 © 2010 Forrester Research, Inc. Reproduction Prohibited
    • European music activity is flat while CD buyingcontinues to drop Buy CDs Digital Music’s Only Watch music videos online Killer Product Go to gigs and concerts Watch live concerts on TV 2010 Watch music DVDs 2009 P2P MusicVisit artist pages on social networks Most online music Buy digital music ! activity is niche Visit social music sites like Last.FM 0% 20% 40% 60% Base: European online consumers Source: European Technographics® Media and Entertainment Surveys, 2009 and 20105 © 2010 Forrester Research, Inc. Reproduction Prohibited
    • 12-15 year olds show little interest in the digital ‘transition’ habits of 16-24 year olds I listen to music on the 25+ radio: trendI rip music CDs on to my PC (i.e. copy from a CD): Burn CDs 16-24 Music P2P trends Buy music online Listen on phone 12-15 Watch music video online trends 0% 20% 40% 60% 80% Age 25+ Age 16-24 Age 12-15 6 © 2010 Forrester Research, Inc. Reproduction Prohibited
    • Music’s three ‘generation’ segments are each defined by technology and channelThe first digital music fans adopted transition technologies that supportedtransitional music behaviors. Digital Natives’ behavior is ‘pure’ digital. Retail and radio Digital gives more Music as pervasive ‘distribute’, telling convenient access soundtrack to people when and to and management interactive social where to listen of distributed music environments 25+ year 16-24 year 12-15 year olds olds olds Analogue Transition Digitally Native Generation Generation Generation7 © 2010 Forrester Research, Inc. Reproduction Prohibited 2009
    • Music’s digital generation divide Analogue Transition Digitally Native Generation Generation Generation Age: 25+ 16-24 12-15Music app iTunes and Mobile and CD and radioof choice: BitTorrent YouTube Weekly 3.8 hours 7 hours 5.5 hours listening: 8 © 2010 Forrester Research, Inc. Reproduction Prohibited 2009
    • AgendaWhy digital music has lost its mojoDigital downloads: the transition technologySPARC: the ingredients of future music products9 © 2010 Forrester Research, Inc. Reproduction Prohibited
    • The car went through numerous evolutionary transitionstages before getting to where it is today10 © 2010 Forrester Research, Inc. Reproduction Prohibited
    • Current digital music products are still only transitiontechnologies ? ? ? Analogue Generation And consumer demand has Transition Generation already moved on Digitally Native (again) Generation11 © 2010 Forrester Research, Inc. Reproduction Prohibited
    • The demand needle has shifted but business models have yet to catch up Access ‘Rip and Burn’ ‘Buy and ‘Watch and Listen’ Share’12 © 2010 Forrester Research, Inc. Reproduction Prohibited
    • Experienceis Experience is the product! the product!13 © 2010 Forrester Research, Inc. Reproduction Prohibited
    • Agenda Why digital music has lost its mojo Digital downloads: the transition technology SPARC: the ingredients of future music products14 © 2010 Forrester Research, Inc. Reproduction Prohibited
    • Music products need… S P A R C15 © 2010 Forrester Research, Inc. Reproduction Prohibited
    • Social: put the crowd in the cloud to bring life, relevancy and context to the music experience16 © 2010 Forrester Research, Inc. Reproduction Prohibited
    • Participative: put interactivity at the heart of music products (especially premium ones)17 © 2010 Forrester Research, Inc. Reproduction Prohibited
    • Accessible: give consumers access. The distribution paradigm is dying. Ownership still matters but access matters more18 © 2010 Forrester Research, Inc. Reproduction Prohibited
    • Relevant: join the dots in the fragmented digital music journey19 © 2010 Forrester Research, Inc. Reproduction Prohibited
    • Connected: embrace connectivity. Music fans are connected and expect their music experiences to be too Types of connected devices 8+ 7+ 6+Millions of 5+ 5.5 15.1 33.3 61.5 98.1 142.8 173.8European 4+ adults 3+ 2+ Base: 14,052 EU7 online adults 20 © 2010 Forrester Research, Inc. Reproduction Prohibited Source: European Technographics Consumer Technology Online Survey, Q4 2009
    • This is not a strategy…. 21 © 2010 Forrester Research, Inc. Reproduction Prohibited
    • Thank youMark Mulliganmmulligan@forrester.comhttp://blogs.forrester.com/mark_mulliganTwitter: @Mark_Mulliganwww.forrester.com © 2009 Forrester Research, Inc. Reproduction Prohibited