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The Future of Music: mobile, social... paid?


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The pdf from my presentation at the CMC Dublin, June 11, 2010 see, on the topic of The Future of Music: from copy to access, from protecting to engaging, from closed to open, from proprietary to public license. Also be sure to read

Published in: Business, Technology
  • Greg, I will leave this comment here even though it really riles me. Just saying that things are complicated and can't be fixed is simply making excuses, not much else. This is what we have heard from the music industry since 1995 and it's the lamest excuse for ignorance I can imagine. I am trying to imagine solutions not excuses. As to advertising: advertising IS ALREADY one of the most common ways of how content is being paid: think Radio & TV. How else do composers get paid for the public performance of their works? The same can and will work on the Internet - it just needs to be more liquid, and LICENSED i.e. blessed with permission. As to the ISP flat rate: this already works very nicely for TDC in Denmark - take a look at their model. Finally, let's move this conversation to Facebook or email. Best regards.
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  • Sorry but all of this is wishful thinking mixed with economic demagogy, if not disrespect for facts and people intelligence...

    Here are a few examples:
    1) music licensing can be standardized and its cost can be shifted to the users.

    Well, laws are very complex, some say unnecessarily so; taxation can be simplified -- but it is not, and there are good reasons for that. Same with music licensing and copyrights. They are complex b/c music creation and distribution involves many stakeholders whose interest have to be represented and protected. Add to this an international dimension, and it will be obvious that one blanket model will never fit all these players -- it is impossible! Besides, who is going to administer such worldwide model, United Nations?

    People consume music at different rates and for different reasons. One flat rate might work in one segment of the industry, but the entire industry, worldwide, for all types of users? Never. Consider for example the needs of a public library in, say, NYC, and a school in New Delhi. Who is going to pay for their patrons' access to music? At what rate? Or, would such public users be excluded from that model? Who else would have to be excluded? Or -- turning the issue around -- would one be required to pay for access from a private computer in addition to a public library's computer, in addition to a mobile radio, in addition to a work station, etc. Will US-based users have to compensate users in less-fortunate countries? Who is going to determine the 'going' rates, ISPs?

    2) Access to music, including multiple access from different devices and from different ISPs can be funded by advertisers, brands, etc. Online advertising was to gross $54B (in 2009).

    First, the billions include ALL online advertising. The majority of which is in adult content and gambling, information, finance, and electronics. Music and music related products commend a tiny fraction of the total. In addition, only a few years back marketing experts predicted that by 2011 internet ad spending would generate $106B. Now the forecast has been lowered to about $60B. In other words, the $54 billions quoted by Gerd is a disappointment not a bonanza. Online advertising does not grow fast enough to cover the cost of digital content. Not to mention that advertising is not 'additional money;' it is cost -- the ad money comes from customers who already paid premium prices for certain goods. And as any cost, it has its reasonable limits. Customers are not going to pay twice as much for a gallon of orange juices to get 'free' music and then 'free' movies (why not? If music should be paid by ads why not movies? ) then 'free' books and magazines, etc. Consumers might pay for more juice but not all the content that wants to be 'free'. And by the same token, marketers are not going to spend 50 cents (they got from selling overpriced juice) on a song. Especially if today's music lovers do not want to pay even half of it. The idea that music can be entirely funded by commercials is ridiculous.

    3) If 900 million people could generate only 10 GBP per year/per person, 9B GBP would be available for paying artists.

    Wow! And, if 6 billion people could send me only $1, only once in their lifetime, I would be a billionaire.... What is this? Some futurist methodology or magical thinking (or both)? How about those ISPs and telecoms. Would they work for free now, no revenue sharing, no costs to cover? All revenues go to artists? Does anyone realize that telecoms take up to 55% of the revenues generated by third party's content? Which means that the typical 99 cent price of a song would have to be either $1.55 or the music owner could get only 45 cents. With lower per-song prices, the royalties would have to be even lower. Is this the promised land?

    Then how about the notion of 'artists' for whom the 9 billions would be available? Which artists, exactly, all of them, at an equal rate, regardless of their talent, experience and popularity? Who would determine who get what? Who would monitor and administer that system, also ISPs? If I were Lady GaGa, I would say, Take your hands off my money.

    Then, what about ITunes, Amazon and hundreds of others who have paid for the licenses and built multi-billion dollar businesses anyway. Should they be dismantled? Let to become bankrupt? Will they ever sit and watch as ISPs and telecoms together with the author of this slide presentation implement the new order?

    Well, these are only a few examples of wishful thinking and complete disregard for anything that might make it look like wishful thinking. But like with all foretelling, one can take it seriously or not.
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The Future of Music: mobile, social... paid?

  1. 1. The Future of Music: Mobile, Video, Social, and...Paid? by Gerd Leonhard
  2. 2. IFPI
  3. 3. What’s important *in this order Talent & Merit Building an Audience Getting Recognition Generating Income
  4. 4. Control = Money
  5. 5. Connect with Fans, Offer Value, Give Reason to Buy = Money Control ≠ Money
  6. 6. Does Protection really make Money...?
  7. 7. Music is already in the Cloud 300+ ways to share Music!
  8. 8. Tomorrow Cheap, ubiquitous, mobile, social Connectivity Today
  9. 9. A connected world is a different world New Behaviors New Standards New Social Contracts New Ways of Remuneration Ars Electronica 2008
  10. 10. Copy Economy Access | Usage | ‘Cloud’ Economy
  11. 11. The Future of Music ‘Consumption’
  12. 12. It’s all about this, first (and then... to own!)
  13. 13. The Toll-Booth Challenge how to monetize access rather than copies Source: istockphoto
  14. 14. Copy Economy License Access Economy
  15. 15. A collective, compulsory blanket license for Music on the Internet
  16. 16. Hat tip to Jim Griffin • Standardized, public licensing terms * • Transparent system of how income is distributed (*initially by country, or region) • One-stop licenses for all rights, collectively • No differentiation between streaming or downloading (instead, it’s all just ‘use’) • License fees per user / month, or a percentage of revenues • License fees can generated in many localized variations (“I pay, you pay, they pay...”)
  17. 17. We have been here before D ! S E EN L I C
  18. 18. Just imagine: If 900 Million people could generate only £ 10 per year / per person, £ 9 Billion would be available for paying artists. •••• If a blanket license for digital music was available, the license fees per user could be entirely funded by advertisers, brands, telecoms, device makers and others!
  19. 19. Hat tip to Jim Griffin per week
  20. 20. Could Advertising help to pay for Music?
  21. 21. Advertising will continue to fund a lot of ‘free’ content
  22. 22. Because Data is the new Oil $1 Trillion
  23. 23. Hat tip to Shelly Palmer Paid Content I pay You pay They pay Free Content
  24. 24. I pay, you pay, they pay *Inspired by Shelly Palmer Subscriptions Micro-Payments Bundles Applications Social Payments Flat Rates Telcos & ISPs Advertisers Device Makers Taxes Patronage
  25. 25. Music 2.0: the pricing logic flips Price Users 100 75 50 25 0 Was Will be
  26. 26. People pay when they see value, when the price is right, and when it’s easy
  27. 27. Free + + + ++ +
  28. 28. This is the new model Acceptance of new Reality Permission / License Fair Collection & Distribution Develop New Generatives
  29. 29. The other 3 Billion (O3B) are coming
  30. 30. Governments Telecoms Authors & Creators Search Engines Advertisers Publishers Consumers We were able to sell copies ‘on our own’, but Device Makers we can’t ‘Sell Access’ on our own!
  31. 31. Music 2.0: the inevitable Shift to Open Open licenses Open innovation Open distribution Open competition Open partnerships Open technologies Open data standards
  32. 32. The 3 most important tools for success Hat tip to Mike Mesnick / Techdirt
  33. 33. Magnetism = Money
  34. 34. Summary License Control ≠ Money
  35. 35. Thanks for your attention! email me at facebook: gleonhard