The Digital Music License & Music Like Water (Gerd Leonhard)
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The Digital Music License & Music Like Water (Gerd Leonhard)

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  • 1. The Digital Music License: why, what, how and who Gerd Leonhard Media Futurist
  • 2. What I do: ‘I give ideas’
  • 3. This is not against Copyright This does not propose that Music should be free, period This is not a diatribe against the large, global music companies This is about creating a solution that is fair, as well as socially and economically realistic This is a plea for collaboration
  • 4. Just like Radio: no more no less Picture by
  • 5. I will not comment much on the proposed 3-strikes legislation
  • 6.
  • 7. All of these ... without Permission
  • 8. Copyright Gridlock
  • 9. So far, Refusal was fruitless - It’s time to switch to Permission Google’s Eric Schmidt (when talking about the book publishers & Google): “We write large checks when we have a great strategy”
  • 10. My gallery of “Yesterday’s People with Yesterday’s Assumptions”
  • 11. Let’s not confuse things
  • 12. The Music Economy is Broken The System is certified dysfunctional Source: Techdirt
  • 13. A recent example
  • 14. 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
  • 15. And this is not a unique problem
  • 16. 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’?
  • 17. Connected people ‘consume’ differently Access tr umps Copy Sha ring is the K ey Driver
  • 18. Listening, Reading & Watching = Copying
  • 19. Controlling distribution - controlling the flow of digital files - is the only way to generate future music revenues 1. Wanting to control the flow of copies on the Net is an understandable response but entirely unrealistic - and not needed! 2. Copies of songs are no longer where the real value of music is - we must sell the scarce not the ubiquitous! 3. Legalizing what is already a de-facto standard is the best way forward
  • 20. We have been here before D ! S E EN L I C
  • 21. 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
  • 22. Public License + Build-in Revenues + Proportional Distribution
  • 23. How would it work? Advertisers “Pool of Social Nets Money” Rev Share & Device Makers License Fee Search Labels per User Publishers ... Rights Organizations PROs / MROs Provide $$$ Collective ...want to align with License Artists / Genres Government ISPs, Programs / Platforms Telecoms & & Services to reach Networks Consumers i.e. Users Percentage of Revenues (10%) or Flat Fee per User ( 1 GBP/ week)
  • 24. So who will pay if it’s not the users fka consumers ...?
  • 25. o t n m m e e t t s s y y s s O O C G E E
  • 26. Brands Music Agencies Advertisers Industry Media Legislation Government Telecom Regulation Google China President Kai Fu Lee: “Mutual Interest, rather than Monopoly, is the key to sustainable growth”
  • 27. Calculation examples 50 Million applicable UK Users (estimated) 200 Million GBP / Month @ 1 GBP/week/user 2.4 Billion per Year earned via the DML 2008 recorded music revenues: 1.36 Billion GBP Advertising & Marketing Spend in the UK (2010): 25 Billion Estimated % to be digital / mobile: 25% i.e. 6.25 Billion GBP Yearly artist’s earnings at 0.1% of total usage: 2.4 Million UK ISP Revenues & Marketing Budgets? UK Mobile Operators Revenues & Marketing Budgets? UK CE / Handset Device Makers?
  • 28. With a new Internet license for Music we don’t just sell something - we also buy something!
  • 29. 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 A new and very lucrative Ecosystem would emerge
  • 30. We don’t pay to eat all the food... we pay for access
  • 31. If we had a public music license, this would already be money in the bank!
  • 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. With a digital music license, the Longtail & Success in the Niches becomes very real, too Image:
  • 34. And this would become a huge business, too
  • 35. Why this is good for the Creators Attention turns automatically into $$ Distribution is available to everyone, by default Many up-selling options will emerge Direct market access is included Marketing costs will be greatly reduced
  • 36. And it’s not just the $$$ Actual, real-time Usage Data Direct Market Access
  • 37. Summary: my proposal *since 1999 • Legalize it: a public, collective, open License for the use of Music online • Collaborative, cross-industry efforts to develop new, web-native revenue streams •A new social contract for Music
  • 38. Music Like Water
  • 39. The Digital Music License Let’s do what’s right for Compensation not for Control Let’s generate future revenues for the Creators not just the Lawyers Let’s do what’s right for Social, Cultural and Business Reasons
  • 40. Thanks for your time • email me at • • facebook: gleonhard • more presentations at 44