Music Like Water: why,
    what, when and how?

                  ‣ Futurist
                  ‣ Strategist
              ...
What I do:




‣ Understand
                          Clients such as IBM, Google,
                         Nokia, DDB, De...
A big “Thank You” to everyone in my Network
    Most of what I ‘know’ you have given to me.




                          ...
Listening, Reading & Watching = Copying




4
                                          4
The value of Music is no longer (just) in the Copy


               Selling ‘units’ is yesterday’s
                 concer...
The value of Music is no longer (just) in the Copy


               Selling ‘units’ is yesterday’s
                 concer...
The World’s OS is Morphing




7
                                 7
The new OS




8
                 8
Sharing? You ain’t seen nothing yet...




9
                                         9
10
     10
The global switch from Closed to Open



         Media & Content
           Telecommunication
     Energy Business Educat...
12
     12
Yet, in Music we are approaching total
          Copyright Gridlock




13
                                              13
This is a very bad idea




14
                               14
Because...




15
                  15
http://mahasiah.wordpress.com/




16
                                      16
What does this remind you of?
     “France's Ministry of Culture estimates that 1,000 people a day could be cut off from
 ...
The Music Economy is Broken
 The System is certified dysfunctional




                                 Source: Techdirt
1...
Let’s not confuse things




19
                                19
Why this can’t possibly work
       200 Million users seems entirely realistic
                  20 songs per day =
      ...
And this is not a unique problem




A market-driven solution is very unlikely
21
                                        ...
But it gets worse




        Private deals for public services?
           What choice did they have?
     How much contr...
A market-driven solution is very unlikely
 "In parallel, the two companies will be working together to protect Universal
 ...
“A new Social Contract”




24
                               24
What would this look like?



         First, legalize it - give permission
      All use - all pay * or otherwise generat...
Public License
   + Build-in Revenues
+ Proportional Distribution




26
                          26
Where will that Euro / Week come from?




27
                                              27
With a new
      Internet
       Music
 License we
don’t just sell
 something -
we also buy
28   something!   28
Many other New Generatives


        Community Premium Services           Permission
       High Definition & Premium Medi...
We don’t pay to eat all the food... we pay for access




30
                                                    30
If we had a public music license, this
 would already be money in the bank!




31
                                       ...
32
     32
So why is there still so little
           revenue from Youtube,
           Myspace, Facebook...?
 • Advertisers are alway...
REVENUE
 Expect radical habit changes when
   the technology actually works




34
                                     34
And this would become a huge business, too




35
                                             35
With a public music license, the Longtail &
Success in the Niches becomes very real, too

                        Image: F...
Summary: my proposal *since 1999
• Legalize it: a public, collective, open
     License for the use of Music online

• Col...
Thanks for listening!

•    email me at gerd@mediafuturist.com
•    twitter.com/gleonhard
•    facebook: gleonhard
•    mo...
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Music Like Water: Gerd Leonhard at A2N 2009 Berlin

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All-together-now (A2N) was a great place to talk about the Future of the Music Industry. Finally, here's a place to discuss real innovation in the music industry. A summary:

* Legalize it: a public, collective, open License for the use of Music online
* Collaborative efforts to develop new, web-native revenue streams
* A new social contract for Content

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Music Like Water: Gerd Leonhard at A2N 2009 Berlin

  1. 1. Music Like Water: why, what, when and how? ‣ Futurist ‣ Strategist ‣ Author & Blogger www.mediafuturist.com twitter.com/gleonhard 1 1
  2. 2. What I do: ‣ Understand Clients such as IBM, Google, Nokia, DDB, Deutsche Telekom, ‣ Develop Ideas Sony BMG, Orange / France Telecom, BBC, ITV, RTL, The ‣ Catalyze Change European Commission, TribalDDB, Omnicom, Siemens, Telkom www.mediafuturist.com Indonesia, BOL... twitter.com/gleonhard 2 2
  3. 3. A big “Thank You” to everyone in my Network Most of what I ‘know’ you have given to me. re d h a n s h e s w ro w e g d g w le n o K 3 3
  4. 4. Listening, Reading & Watching = Copying 4 4
  5. 5. The value of Music is no longer (just) in the Copy Selling ‘units’ is yesterday’s concern - and so is the definition of a ‘Sale’ Trying to maintain total control of distribution is pointless 5 5
  6. 6. The value of Music is no longer (just) in the Copy Selling ‘units’ is yesterday’s concern - and so is the definition of a ‘Sale’ Trying to maintain total control of distribution is pointless 6 6
  7. 7. The World’s OS is Morphing 7 7
  8. 8. The new OS 8 8
  9. 9. Sharing? You ain’t seen nothing yet... 9 9
  10. 10. 10 10
  11. 11. The global switch from Closed to Open Media & Content Telecommunication Energy Business Education 11 11
  12. 12. 12 12
  13. 13. Yet, in Music we are approaching total Copyright Gridlock 13 13
  14. 14. This is a very bad idea 14 14
  15. 15. Because... 15 15
  16. 16. http://mahasiah.wordpress.com/ 16 16
  17. 17. What does this remind you of? “France's Ministry of Culture estimates that 1,000 people a day could be cut off from the internet under the bill. After first being sent a warning email and then a formal letter by Hadopi, those accused of illegal file- sharing for a third time could be disconnected for up to a year and face a €300,000 fine and jail time. Even those found guilty of "negligence" for allowing others (such as their children) to pirate online material risk a month-long internet suspension and a €1,500 fine..." Source: The Guardian Sept 10 09 17 17
  18. 18. The Music Economy is Broken The System is certified dysfunctional Source: Techdirt 18 18
  19. 19. Let’s not confuse things 19 19
  20. 20. 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 = 50% of Google’s yearly $$ 20 20
  21. 21. And this is not a unique problem A market-driven solution is very unlikely 21 21
  22. 22. 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’? 22 22
  23. 23. A market-driven solution is very unlikely "In parallel, the two companies will be working together to protect Universal Music's intellectual property and drive a material reduction in the unauthorised distribution of its repertoire across Virgin Media's network," said a statement. 23 23
  24. 24. “A new Social Contract” 24 24
  25. 25. 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 25 25
  26. 26. Public License + Build-in Revenues + Proportional Distribution 26 26
  27. 27. Where will that Euro / Week come from? 27 27
  28. 28. With a new Internet Music License we don’t just sell something - we also buy 28 something! 28
  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 29 A new and very lucrative Ecosystem would emerge 29
  30. 30. We don’t pay to eat all the food... we pay for access 30 30
  31. 31. If we had a public music license, this would already be money in the bank! 31 31
  32. 32. 32 32
  33. 33. 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
  34. 34. REVENUE Expect radical habit changes when the technology actually works 34 34
  35. 35. And this would become a huge business, too 35 35
  36. 36. With a public music license, the Longtail & Success in the Niches becomes very real, too Image: Flickr.com/WhiskersandWhispers 36 36
  37. 37. Summary: my proposal *since 1999 • Legalize it: a public, collective, open License for the use of Music online • Collaborative efforts to develop new, web-native revenue streams • A new social contract for Content 37 37
  38. 38. Thanks for listening! • email me at gerd@mediafuturist.com • twitter.com/gleonhard • facebook: gleonhard • more presentations at www.mediafuturist.com 38 38

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