Music2: The Future of Radio (media futurist Gerd Leonhard)

Slide 1: Gerd Leonhard Presentation at RadioDays 2007 Music 2.0 and the Future of Radio? www.mediafuturist.com Gerd Leonhard www.mediafuturist.com Monday, January 21, 2008 1

Slide 2: Radio used to have a Monopoly in Attention! Gerd Leonhard Music & Media Futurist www.mediafuturist.com Monday, January 21, 2008 2

Slide 3: The problem is not the new ideas - but how to get rid of the old ones. So let’s start there. Gerd Leonhard Music & Media Futurist www.mediafuturist.com Monday, January 21, 2008 3

Slide 4: Radio today: competition coming from all sides Social Networks and Blogs Car Audio Systems Wimax Music Ipod Podcasts iphone Satellite Radio Mobile Music What’s good about all this: Choice What’s bad about all this: The Paradox of Choice Gerd Leonhard Music & Media Futurist www.mediafuturist.com Monday, January 21, 2008 4

Slide 5: Gerd Leonhard Music & Media Futurist www.mediafuturist.com Monday, January 21, 2008 5

Slide 6: Me, September 2007 Friction is Fiction Gerd Leonhard Music & Media Futurist www.mediafuturist.com Monday, January 21, 2008 6

Slide 7: SMS +41 79 79 353 84 Across the world, 1.1 Billion People use the Internet, 1.4 Billion watch TV, and 2.2 Billion use Mobile Phones So HOW will RADIO be consumed in the Future, and what is its value proposition (both for music and for audio) Gerd Leonhard www.mediafuturist.com Monday, January 21, 2008 7

Slide 8: The Net Generation: I program my media - it does not program me! Gerd Leonhard Music & Media Futurist www.mediafuturist.com Monday, January 21, 2008 8

Slide 9: The key drivers of Change • Broadband • Mobility • Social Networks • Blogs and User Generated Content (UGC) • Total Fragmentation of the Audiences • Globalization (and localization) • Convergence Gerd Leonhard www.mediafuturist.com Monday, January 21, 2008 9

Slide 10: Gerd Leonhard www.mediafuturist.com Monday, January 21, 2008 10

Slide 11: Gerd Leonhard www.mediafuturist.com Monday, January 21, 2008 11

Slide 12: W e a r e h ea d i ng int o a a cc el e ra t i ng c o nverg enc e o f A ud i o a nd V i d eo . Gerd Leonhard Music & Media Futurist www.mediafuturist.com Monday, January 21, 2008 12

Slide 13: And in advertising By 2008, online advertising spending in the US is expected to surpass radio advertising spending Gerd Leonhard Music & Media Futurist www.mediafuturist.com Monday, January 21, 2008 13

Slide 14: A few shocking facts from the U.S. Gerd Leonhard Music & Media Futurist www.mediafuturist.com Monday, January 21, 2008 14

Slide 15: In the US: tuning out of Radio is guaranteed Gerd Leonhard Music & Media Futurist www.mediafuturist.com Monday, January 21, 2008 15

Slide 16: Radio ad revenues are not going away - they just won’t be growing. Gerd Leonhard Music & Media Futurist www.mediafuturist.com Monday, January 21, 2008 16

Slide 17: and then comes... Gerd Leonhard Music & Media Futurist www.mediafuturist.com Monday, January 21, 2008 17

Slide 18: ‘How’ will matter less and less. ‘What’ will matter more and more Gerd Leonhard www.mediafuturist.com Monday, January 21, 2008 18

Slide 19: Remember when Radio had a Monopoly in Attention? Gerd Leonhard Music & Media Futurist www.mediafuturist.com Monday, January 21, 2008 19

Slide 20: Consumers inevitably use the best innovations that are available - legal or not Gerd Leonhard Music & Media Futurist www.mediafuturist.com Monday, January 21, 2008 20

Slide 21: three Gerd Leonhard Music & Media Futurist www.mediafuturist.com Monday, January 21, 2008 21

Slide 22: Imagine a page, a button, a Canvas where you simply put all the stations that you want to listen to. A canvas that you can always have with you (see Netvibes, iGoogle), no matter how you receive the content. Radio fills the need to filter Choice. Gerd Leonhard Music & Media Futurist www.mediafuturist.com Monday, January 21, 2008 22

Slide 23: Consumers are, now more than ever before, seeking consolidated, trustworthy content, recognition and community - even more when it comes to mobile and Internet entertainment This is still the biggest opportunity in Radio. Gerd Leonhard Music & Media Futurist www.mediafuturist.com Monday, January 21, 2008 23

Slide 24: New technologies often disrupt ecosystems but always make the market bigger Gerd Leonhard Music & Media Futurist www.mediafuturist.com Monday, January 21, 2008 24

Slide 25: The De-Walling: • Music formats will be either open or 100% compatible - DRM is the past • Music as a service will become a default setting, and the ‘sell units’ paradigm is ending • Creation of new revenue flows will be more important than controlling distribution • The People formerly known as Consumers are gaining more power by the minute • Music licensing will be drastically simplified Isn’t Radio the definition of Music as a Service? Gerd Leonhard www.mediafuturist.com Monday, January 21, 2008 25

Slide 26: Thanks to the Net Generation & the Digital Natives, Social Networks on the Internet are the Next Radio Gerd Leonhard Music & Media Futurist www.mediafuturist.com Monday, January 21, 2008 26

Slide 27: Global Social Networking is already bigger than Radio in the U.S. Gerd Leonhard Music & Media Futurist www.mediafuturist.com Monday, January 21, 2008 27

Slide 28: The People formerly known as Listeners (aka Consumers) Gerd Leonhard Music & Media Futurist www.mediafuturist.com Monday, January 21, 2008 28

Slide 29: The Medium formerly known as Radio Gerd Leonhard Music & Media Futurist www.mediafuturist.com Monday, January 21, 2008 29

Slide 30: Soon, most of them will get most of their ‘Radio’ via any digital network - the Internet dominates Gerd Leonhard Music & Media Futurist www.mediafuturist.com Monday, January 21, 2008 30

Slide 31: Why is your station not broadcasting on Facebook, Lunarstorm, Sulekha.net or Orkut? Gerd Leonhard Music & Media Futurist www.mediafuturist.com Monday, January 21, 2008 31

Slide 32: Because In all Media, Push is becoming Pull Gerd Leonhard Music & Media Futurist www.mediafuturist.com Monday, January 21, 2008 32

Slide 33: Just different words for the same thing... Broadcasting Streaming Tubesocking Public Playlisting Performance Download Listening Streamripping PodcatchingCopy Buffering Caching Digital Renting Phonographic Delivery (DPD) Gerd Leonhard Music & Media Futurist www.mediafuturist.com Monday, January 21, 2008 33

Slide 34: The most important development in the Context of Radio Licensing is The Flat Rate for Digital Music Gerd Leonhard Music & Media Futurist www.mediafuturist.com Monday, January 21, 2008 34

Slide 35: And for Public Radio The Net Generation will not continue to pay a public Radio or TV License without archiving, time-shifting, place-shifting and device shifting - i.e. with build-in DELIVERY options Gerd Leonhard Music & Media Futurist www.mediafuturist.com Monday, January 21, 2008 35

Slide 36: The Reality is: • The Internet is a Giant Copy Machine • Digital Radio IS Distribution • From the listeners standpoint, Digital Radio MUST offer time / place / device shifting which is... Distribution • Case in point: RSS and the Google Reader Gerd Leonhard Music & Media Futurist www.mediafuturist.com Monday, January 21, 2008 36

Slide 37: The bottom line: In media, Friction is now Fiction Gerd Leonhard Music & Media Futurist www.mediafuturist.com Monday, January 21, 2008 37

Slide 38: Very soon - listening IS receiving Gerd Leonhard Music & Media Futurist www.mediafuturist.com Monday, January 21, 2008 38

Slide 39: A Logic Challenge Radio is Free Records / CDs are not If the Internet is the New Radio - are Copies are ‘free’ ? Gerd Leonhard Music & Media Futurist www.mediafuturist.com Monday, January 21, 2008 39

Slide 40: EU Radio in 3-5 years • 100% digital (in all its variations), and 50% converged with the Net • All stations everywhere,anytime, any way • Video and Audio converge • Community features are a standard • Geography fades, borders become soft • License is both questioned and then expanded (based on a Flat Rate for Digital Music) • Advertising2.0 emerges • Public Radio offers full archives on-demand Gerd Leonhard Music & Media Futurist www.mediafuturist.com Monday, January 21, 2008 40

Slide 41: EU Radio in 10 years • The term “Radio” simply refers to ‘curated programming’ • Public radio is the #1 curator of a huge digital library • The ‘Copy versus Performance’ (listen versus own) distinction is over • Everything is on demand - few or nothing remains scheduled Gerd Leonhard Music & Media Futurist www.mediafuturist.com Monday, January 21, 2008 41

Slide 42: The trigger factors: • Highspeed Wireless Internet everywhere • WiBro in the car • 4G Wireless cell phone networks fully deployed How long? • Radios with WLAN chips • Cell phones with DAB receivers (and WLAN) • Mobile computing devices that talk effortlessly to each other • Web5.0 as easy as a TV remote control Gerd Leonhard Music & Media Futurist www.mediafuturist.com Monday, January 21, 2008 42

Slide 43: What is good about Radio? What is good about Audio on the Internet? *** *** ** • Free or feels like free • Ubiquitous * • Easy to use for anyone ** • Does not require engagement *** • Trusted, professional curators *** • Known brands * • Local context • Strong tradition • Great way to discover music Gerd Leonhard Music & Media Futurist www.mediafuturist.com Monday, January 21, 2008 43

Slide 44: Radio’s Future is on the Internet, with the Net Generation, and with fully integrated Content Delivery Gerd Leonhard Music & Media Futurist www.mediafuturist.com Monday, January 21, 2008 44

Slide 45: The 5 Inevitables 1.Radio must support time-shifting 2.Radio must support space-shifting 3.Radio must support sharing 4.Radio must support interactivity 5.Radio must support community Gerd Leonhard Music & Media Futurist www.mediafuturist.com Monday, January 21, 2008 45

Slide 46: Radio is a perfect fit for the experience economy Gerd Leonhard Music & Media Futurist www.mediafuturist.com Monday, January 21, 2008 46

Slide 47: This is where the growth is Gerd Leonhard Music & Media Futurist www.mediafuturist.com Monday, January 21, 2008 47

Slide 48: The new currencies in Media • Getting (and keeping) attention • Trust • Influence • Reputation Gerd Leonhard Music & Media Futurist www.mediafuturist.com Monday, January 21, 2008 48

Slide 49: And advertising follows the trends of mass-personalization Souce: Booz Hamilton Report Gerd Leonhard Music & Media Futurist www.mediafuturist.com Monday, January 21, 2008 49

Slide 50: From Impression to Relevance Gerd Leonhard Music & Media Futurist www.mediafuturist.com Monday, January 21, 2008 50

Slide 51: Integrate the audience! Provide a platform! The NYT went ‘open access’ 3 days ago - after maintaining a wall for the past 5 years (incl. RSS) Gerd Leonhard Music & Media Futurist www.mediafuturist.com Monday, January 21, 2008 51

Slide 52: You must take Radio’s walls down, too: • Archive Access • Web-based access on all platforms • Radio as social medium Don’t hide behind any wall. Gerd Leonhard Music & Media Futurist www.mediafuturist.com Monday, January 21, 2008 52

Slide 53: Changes in the content industries Content 1.0 Content 2.0 Distribution Attention Shelf Space Mind-share Mass Marketing Niche Marketing Monolog Dialog Influence & Control Reputation Control Attention & Trust Gerd Leonhard, Music & Media Futurist Monday, January 21, 2008 53

Slide 54: So if I ran the circus, I would... • Widgetize my radio stations (syndicate radio shows via embedded players), turn them into channels on social networks • Turn my listeners into active network members, roll out Engagement programs • Offer archives of everything, no matter what • Mobilize my radio station • Demand extended licensing grants, and one-stop licensing • Lobby for a digital music flat rate • Push converged service: audio, video, text • Build my brand and become an EXPERIENCE Gerd Leonhard Music & Media Futurist www.mediafuturist.com Monday, January 21, 2008 54