Music Like Water: why,
what, when and how?
‣ Futurist
‣ Strategist
‣ Author & Blogger
www.mediafuturist.com
twitter.com/gleonhard
1
1

What I do:
‣ Understand
Clients such as IBM, Google,
Nokia, DDB, Deutsche Telekom,
‣ Develop Ideas Sony BMG, Orange / France
Telecom, BBC, ITV, RTL, The
‣ Catalyze Change European Commission, TribalDDB,
Omnicom, Siemens, Telkom
www.mediafuturist.com Indonesia, BOL...
twitter.com/gleonhard
2
2

A big “Thank You” to everyone in my Network
Most of what I ‘know’ you have given to me.
re d
h a
n s
h e
s w
ro w
e g
d g
w le
n o
K
3
3

Listening, Reading & Watching = Copying
4
4

The value of Music is no longer (just) in the Copy
Selling ‘units’ is yesterday’s
concern - and so is the
definition of a ‘Sale’
Trying to maintain total
control of distribution is
pointless
5
5

The value of Music is no longer (just) in the Copy
Selling ‘units’ is yesterday’s
concern - and so is the
definition of a ‘Sale’
Trying to maintain total
control of distribution is
pointless
6
6

The World’s OS is Morphing
7
7

The new OS
8
8

Sharing? You ain’t seen nothing yet...
9
9

10
10

The global switch from Closed to Open
Media & Content
Telecommunication
Energy Business Education
11
11

12
12

Yet, in Music we are approaching total
Copyright Gridlock
13
13

This is a very bad idea
14
14

Because...
15
15

http://mahasiah.wordpress.com/
16
16

What does this remind you of?
“France's Ministry of Culture estimates that 1,000 people a day could be cut off from
the internet under the bill. After first being sent a warning email and then a formal
letter by Hadopi, those accused of illegal file- sharing for a third time could be
disconnected for up to a year and face a €300,000 fine and jail time. Even those found
guilty of "negligence" for allowing others (such as their children) to pirate online
material risk a month-long internet suspension and a €1,500 fine..."
Source: The Guardian Sept 10 09
17
17

The Music Economy is Broken
The System is certified dysfunctional
Source: Techdirt
18
18

Let’s not confuse things
19
19

Why this can’t possibly work
200 Million users seems entirely realistic
20 songs per day =
4 Billion plays per day @ 1 Cent USD
$40 Million PER DAY in license fees for the masters
14.6 BILLION USD per year in licensing costs
Plus: costs for Public Performance in 50+ countries
Plus: payments to composers
Plus: technical costs = 50% of Google’s yearly $$
20
20

And this is not a unique problem
A market-driven solution is very unlikely
21
21

But it gets worse
Private deals for public services?
What choice did they have?
How much control does this leave them?
Is this ‘fair business practice’?
22
22

A market-driven solution is very unlikely
"In parallel, the two companies will be working together to protect Universal
Music's intellectual property and drive a material reduction in the
unauthorised distribution of its repertoire across Virgin Media's network,"
said a statement.
23
23

“A new Social Contract”
24
24

What would this look like?
First, legalize it - give permission
All use - all pay * or otherwise generate $ value
Many kinds of payments emerge
Rights are public, open and standardized
Licenses are available to every business
Data-Mining and Market Access is $ value, too
25
25

Public License
+ Build-in Revenues
+ Proportional Distribution
26
26

Where will that Euro / Week come from?
27
27

With a new
Internet
Music
License we
don’t just sell
something -
we also buy
28 something! 28

Many other New Generatives
Community Premium Services Permission
High Definition & Premium Media
Mobile Device Applications & Software
Live-Concerts, Web-Casts, Virtual Shows...
Flat Rates, Bundles, Revenue-Sharing
29 A new and very lucrative Ecosystem would emerge
29

We don’t pay to eat all the food... we pay for access
30
30

If we had a public music license, this
would already be money in the bank!
31
31

32
32

So why is there still so little
revenue from Youtube,
Myspace, Facebook...?
• Advertisers are always 2-3 years behind
• Lack of permission for legal content has
resulted in much slower adoption
• Lack of public license has deterred new
investors
• Mobile broadband and smart mobile
devices are just now starting to take off
33
33

REVENUE
Expect radical habit changes when
the technology actually works
34
34

And this would become a huge business, too
35
35

With a public music license, the Longtail &
Success in the Niches becomes very real, too
Image: Flickr.com/WhiskersandWhispers
36
36

Summary: my proposal *since 1999
• Legalize it: a public, collective, open
License for the use of Music online
• Collaborative efforts to develop new,
web-native revenue streams
• A new social contract for Content
37
37

Thanks for listening!
• email me at gerd@mediafuturist.com
• twitter.com/gleonhard
• facebook: gleonhard
• more presentations at
www.mediafuturist.com
38
38