The New Generatives: Selling Music in a Connected World

www.mediafuturist.com twitter.com/gleonhard 10 new Generatives: Selling Music in a connected World

www.mediafuturist.com What I do: www.twitter.com/gleonhard Photo Credits: as indicated, or via iStockphoto

None of these ideas will work if... There is no real merit, value and uniqueness in what you do You don’t have an audience (attention) You are not willing, or not able to talk to your fans, all the time You really want to learn how to swim but are still afraid to get wet

Merit is where it all starts.

Money Conversion Attention Merit, Quality & Uniqueness

Making money is a consequence of Attention (not the other way round)

Note: there is no one-fits-all recipe! Not all Music is the same Not all Money is the same Not all Users are the same Not all Cultures are the same

So what is ‘Monetization’? 1.A real-cash transaction of any kind (often pre-consumption) 2.Revenue Sharing (usually post-consumption) 3.Non-cash remunerations 4.Upstream payments (Freemium)

Getting Paid for Creation *Hat tip to Shelly Palmer 3rd party pays You pay You I pay pay 3rd party I pay I pay pays 3rd party pays *constantly changing variations

Expect extreme fragmentation of Music Commerce Models

2 important distinctions 1) Monetize collectively Public Broadcasting Blanket Performance & Webcasting Licenses Revenue Bundles Flat Rates Sharing 2) Monetize individually Music Sales Sync Licenses Branding Many others (coming up!)

Many other New Generatives Community Premium Services Permission High Definition & Premium Versions Mobile Device Applications & Software Monetize collectively Live-Concerts, Web-Casts, Virtual Shows... Flat Rates, Bundles, Revenue-Sharing

What does ‘selling music’ really mean? • iTunes sales • CD sales • Songs used in Ads or Games • Youtube clicks? • Spotify plays? • Last.fm plays? • Facebook or Mog ‘Like’? • Bookmarked song? • Forwarded link via email? How will you measure success?

The Music 2.0 Model Business Models Business Models Business Models Artist / Creator

Music Commerce 2.0: don’t try to sell what is Ubiquitous - sell what is Scarce Source: Chris Brogan

What is scarce? What could you sell? Offers that save time, and Users’ time and attention award / keep attention Curation and Selection Offers that save the users from Filtering, Context the overload and filter-failures Offers that generate trust and Trust create personal connections Offers based on unique, Meaningful experiences personal, real experiences Offers that provide for real Meaningful relationships conversations and connections

Offers that save time, and award / keep attention Offers that save the users from the overload and filter- failures Offers that generate trust and create personal connections Offers based on a unique, personal, real experience Offers that provide for real conversation and connections

Sell via Twitter....?! Source: Digital Media Wire

How Dell does it Source: Paid Content.org

The search for New Generatives ®+©=$ ?=$

=$ Networked Model Broadcast Model

When the browser becomes the iPod...

The Toll-Booth Challenge: how to monetize ACCESS rather than copies Source: istockphoto

From Chris Anderson’s “Free” Presentation Source: Wired.com

Free gets you to a place where you can get paid. Quote by Fred Wilson, Union Square Ventures www.avc.com

“Free” only makes sense if Source: Slideshare you can actually convert

Charging for saving time...

Free to Paid: Examples

The future is no longer binary.... Source: Chris Anderson / Wired It’s fuzzy.

It’s not either... or! versus

Hybrid Models in many variations

Music Pricing Futures Price of legal copy’ Number of legal, known, engaged Users Premium Buyers (i.e. converted users) 100 75 50 25 0 Was Will be

The Mobile & Social ‘Consumption’ of Music is the #1 Growth Opportunity

Music Products as Software on Mobile Devices Source: Gigaom

Mobile & Social: the key opportunities

The next format shift: Music as... Software!

Examples

New packages... new $$

My top 10 for ‘Monetizing Music’ from music products: downloads, CDs etc from music services: streaming, bundles, revenue sharing, flat-rates from broadcasting & public performances from licensing: synchronization / B2B deals from branding & sponsorships from live performances, concerts, events from virtual concerts etc from virtual goods (licenses) from new kinds of ‘stuff’ (merchandising etc) from direct-to-fan services

Direct-to-the-fan offerings

Mike Masnik (Techdirt) nailed it, last year

The process 1. Attract the right people by offering relevant Content 2. Get and hold their Attention, build Trust 3. Think Followers not Users 4. Offer added values to convert followers into $$

The Vortex Principle Upstream Downstream Source: STLPartners / Telco20.net

The mission: get the vortex to spin. Connect upstream and downstream opportunities.

Upstream Revenue Opportunities: Some Examples • High-Definition Content (Classical, Jazz, Concerts...) • Concert downloads (after attendance, or without) • Virtual concerts, events, clubs • Virtual goods (e.g. wallpaper, icons, greetings etc) • Fan packages (direct connection to artists, pre- releases, customized editions, special privileges etc) • Special products 2.0: compilations, audio-video packages (see SoundWalk), mobile applications etc • Next-generation physical products (e.g. 2 TB interactive & connected DVD+) • Custom-made, on-demand merchandising (see Nike+) • Many more that are yet to be invented...

Selling copies is only the tip of the iceberg Sell downloads, CDs... Copies Your task: to define and exploit what’s below!

The Internet

Please: forget most of what you know about Advertising

About Advertising and $ for Music Yes, it has been disappointing up to now Advertisers are usually 5 years behind Global spend on Ads: ~ 700 Billion USD Every large audience can be monetized Mobile, video and social media ad budgets will dramatically increase in the next 18 months It may take longer than anticipated - but will end up much larger than we thought!

Yes, there are serious $$ in Advertising

• ~ $ 900 Billion USD Global Advertising Spend in 2012 • 30-50% shifting to digital media / interactive / mobile • Opt-in, personalized, targeted Advertising = Content • Ads have always paid for Content

Virtual Items: a huge opportunity for Music!

Where are the new markets?

Do get into Branding you have to be a ... Brand!

Rivers of Content - big Opportunities in:

The New Generatives Content Sales Selling Context Selling Curation Selling Timeliness 5% Embodiment / Packaging 15% 20% Selling Relevance Others 15% 15% 10% 20%

Action Spots (Summary) • Mobile (Applications!) • Advertising / Revenue Sharing (e.g. Social Networks, Search, Portals & Communities) • Flat Rates & Blankets (fka Broadcasting, now: Telecoms, ISPs and mobile operators) • Synchronization (TV, ads, movies, games) • Branding & Sponsorships • Virtual Items • New Music Products (RBT etc) • Up-selling from ‘free’ (High Definition, AR etc) • Customization & Personalization • Virtual concerts & events

As Steve Jobs says: Stay Hungry. Stay Foolish.

Thanks for your time! email me at gerd@mediafuturist.com twitter.com/gleonhard Facebook: gleonhard more presentations at www.mediafuturist.com

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The New Generatives: Selling Music in a Connected World

by Gerd Leonhard on Jan 24, 2010

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The New Generatives: Selling Music in a Connected World — Presentation Transcript