The Digital Music
License: why, what,
   how and who
     Gerd Leonhard
     Media Futurist
 www.mediafuturist.com
www.twi...
What I do:




 ‘I give ideas’
www.mediafuturist.com
twitter.com/gleonhard
www.payingwithattention.com
This is not against Copyright
 This does not propose that Music
       should be free, period
 This is not a diatribe agai...
Just like Radio: no more no less




       Picture by http://flickr.com/photos/matteo86photonature/
I will not comment much on the
 proposed 3-strikes legislation
http://mahasiah.wordpress.com/
All of these ... without Permission
Copyright Gridlock
So far, Refusal was fruitless -
         It’s time to switch to
                Permission
      Google’s Eric Schmidt (wh...
My gallery of “Yesterday’s People with Yesterday’s Assumptions”
Let’s not confuse things
The Music Economy is Broken
The System is certified dysfunctional




                         Source: Techdirt
A recent example
Why this can’t possibly work
      200 Million users seems entirely realistic
                 20 songs per day =
       4...
And this is not a unique problem
But it gets worse




       Private deals for public services?
          What choice did they have?
    How much control ...
Connected people ‘consume’ differently




Access tr  umps Copy
Sha ring is the K ey Driver
Listening, Reading & Watching = Copying
Controlling distribution - controlling the
 flow of digital files - is the only way to
    generate future music revenues
...
We have been here before


                     D !
               S E
          EN
  L I   C
What would this look like?



      First, legalize it - give permission
   All use - all pay * or otherwise generate $ va...
Public License
   + Build-in Revenues
+ Proportional Distribution
How would it work?
                                             Advertisers
   “Pool of
                                  ...
So who will pay if it’s not the
 users fka consumers ...?
o t
          n
        m m
       e e
      t t
     s s
    y y
   s s
  O O
 C G
E E
Brands
      Music          Agencies
                    Advertisers
     Industry         Media
                         ...
Calculation examples
         50 Million applicable UK Users (estimated)
       200 Million GBP / Month @ 1 GBP/week/user
...
With a new Internet
license for Music we
    don’t just sell
something - we also
buy something!
Many other New Generatives


      Community Premium Services             Permission
    High Definition & Premium Media

...
We don’t pay to eat all the food... we pay for access
If we had a public music license, this
would already be money in the bank!
So why is there still so little revenue from
   Youtube, Myspace, Facebook...?

• Advertisers are always 2-3 years behind
...
With a digital music license, the Longtail &
Success in the Niches becomes very real, too

                         Image:...
And this would become a huge business, too
Why this is good for the
                   Creators
     Attention turns automatically into $$
Distribution is available ...
And it’s not just the $$$

Actual, real-time Usage Data

Direct Market Access
Summary: my proposal *since 1999
• Legalize it: a public, collective, open
 License for the use of Music online

• Collabo...
Music Like Water
The Digital Music License

      Let’s do what’s right for
  Compensation not for Control
Let’s generate future revenues f...
Thanks for your time

•    email me at gerd@mediafuturist.com
•    twitter.com/gleonhard
•    facebook: gleonhard
•    mor...
The Digital Music License & Music Like Water (Gerd Leonhard)
The Digital Music License & Music Like Water (Gerd Leonhard)
The Digital Music License & Music Like Water (Gerd Leonhard)
The Digital Music License & Music Like Water (Gerd Leonhard)
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The Digital Music License & Music Like Water (Gerd Leonhard)

  1. 1. The Digital Music License: why, what, how and who Gerd Leonhard Media Futurist www.mediafuturist.com www.twitter.com/gleonhard
  2. 2. What I do: ‘I give ideas’ www.mediafuturist.com twitter.com/gleonhard www.payingwithattention.com
  3. 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. 4. Just like Radio: no more no less Picture by http://flickr.com/photos/matteo86photonature/
  5. 5. I will not comment much on the proposed 3-strikes legislation
  6. 6. http://mahasiah.wordpress.com/
  7. 7. All of these ... without Permission
  8. 8. Copyright Gridlock
  9. 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. 10. My gallery of “Yesterday’s People with Yesterday’s Assumptions”
  11. 11. Let’s not confuse things
  12. 12. The Music Economy is Broken The System is certified dysfunctional Source: Techdirt
  13. 13. A recent example
  14. 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. 15. And this is not a unique problem
  16. 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. 17. Connected people ‘consume’ differently Access tr umps Copy Sha ring is the K ey Driver
  18. 18. Listening, Reading & Watching = Copying
  19. 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. 20. We have been here before D ! S E EN L I C
  21. 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. 22. Public License + Build-in Revenues + Proportional Distribution
  23. 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. 24. So who will pay if it’s not the users fka consumers ...?
  25. 25. o t n m m e e t t s s y y s s O O C G E E
  26. 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. 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. 28. With a new Internet license for Music we don’t just sell something - we also buy something!
  29. 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. 30. We don’t pay to eat all the food... we pay for access
  31. 31. If we had a public music license, this would already be money in the bank!
  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. With a digital music license, the Longtail & Success in the Niches becomes very real, too Image: Flickr.com/WhiskersandWhispers
  34. 34. And this would become a huge business, too
  35. 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. 36. And it’s not just the $$$ Actual, real-time Usage Data Direct Market Access
  37. 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. 38. Music Like Water
  39. 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. 40. Thanks for your time • email me at gerd@mediafuturist.com • twitter.com/gleonhard • facebook: gleonhard • more presentations at www.mediafuturist.com 44
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