So these were some of the topics I talked about: 1) What is this new framework for the music industry - which facts and trends do we need to consider? 2) What are the key value shifts (pricing, and access versus copy), and what do they mean? 3) Why we need that 'new social contract' and thereby legalize digital music (and the discussion of the proposed digital music license) 4) The new logic of bundled access, embodiment and experience, and the need for a new 'pool of money' (to quote Jim Griffin) 5) The irreversible shift in the perception of 'copies' of content 6) Future revenues based on Attention 7) Why the future is not in selling what is abundant but what is scarce 8) Why content creators and rights-holders do not compete with free ... and much more fun stuff;) Enjoy
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Making money with music when the copy is 'free'
1. Making Money with Music
when the copy is ‘free’
by Gerd Leonhard
‣ Futurist
www.mediafuturist.com ‣ Strategist
twitter.com/gleonhard ‣ Author & Blogger
2. My job is to understand
things and develop ideas
for my clients.
7. Enormous Value Shifts
Sales, Distribution & Marketing Costs
Content Ceration Costs
Traditional, Offline Content Revenues
Revenues of Offline Content Formats & Models simply moved Online
Potential Revenues of Web-Native Content Formats & Models
10
7.5
5
2.5
8. We must urgently divorce ourselves from
the old shapes of music delivery, and from
looking at the distribution of music as the
most important money maker.
“A new Social Contract”
9. If distribution is indeed
uncontrollable we will need
to legalize, bundle and
integrate it - all else will fail
22. Why I have spend $1000+ on iStockphoto
• Good quality images
• Finding the right photo is quick and easy
• The rights (licenses) are cleared
• The price is right (well... mostly)
• I don’t pay just for the content - I
pay for ease of use, peace of mind,
the interface, service & curation...!
23. Direct, immediate, certified, personal content delivery
How much of a premium would you pay to
receive the new song the very moment it
is finished, from the creator, himself,
certified, personalized... guaranteed?
24. Relevant, customizable, time-saving Curation
How much of a premium would you pay to
get the 50 best chapters from the 50 best
business books, in a single new eBook?
25. Bundling music services within Social Networks
How much of a premium would you pay to
have instant sharing of your peers’
playlists and favorites build-into your
mobile, your TV, your car-radio...?
26. Attractive, unique, premium Packaging
How much of a premium would you pay to
have your preferred content uniquely available
on your favorite mobile device, at all times?
27. 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
28. 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
29. We must get much better at these 2 things:
3rd
Party
Pays
34. Rights holders and content owners now
have the choice between:
A) The Illusion of Control - and
declining Revenues
B) ‘Open’ - and new Revenues
35. Content Futures: Copy $ down, Attention $$ up
Copy Based Revenues Attention Based Revenues
10.0
7.5
5.0
2.5
0
Was Is Soon Near Future Mid-term Future
36. Attention-based revenues...???
• Provide value for up-stream
entities and related providers
• All kinds of Up-selling
• Attention-Transfer (aka
Advertising)
• Crowd-funding of new
productions
41. • ~ $ 900 Billion USD Global
Advertising Spend in 2012
• 30-50% shifting to digital
media / interactive / mobile
• Opt-in, personalized, targeted
Advertising = Content
42.
43.
44. Why Google is willing to ‘pay’ for music
- in China
Why ISPs will be willing to ‘pay’ for music
48. The Music 2.0 Model Business Models
Business Models
Business Models
Artist /
Creator
49. The Mobile & Social
‘Consumption’ of Music is the
#1 Growth Opportunity
Deep Collaboration with
Telecoms & Operators is
the #1 Mission for the
Music Industry
50. But: the content pricing & licensing
issues cannot be solved without the solid
engagement of Telecoms, ISPs and
Operators (as well as the Advertisers)
51. We urgently need either a
voluntary, collective license
proposal by the rights-holders,
or legislation that legalizes and
monetizes the use of Music on
the Internet.
Image: TelecomTV