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Mark Mulligan: All Change keynote presentation


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Presented at LSO digital symposium All Change or Business as Usual on 11
Sep 2009

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Mark Mulligan: All Change keynote presentation

  1. 2. Mark Mulligan Vice President & Research Director Forrester Research September 11 th , 2009 Music and the Media Meltdown
  2. 3. Music and the Media Meltdown <ul><li>How We Got Here </li></ul><ul><li>The Media Meltdown </li></ul><ul><li>Relationships Not Releases </li></ul>
  3. 4. Digital Music 2.0: From Pay to Free, and Back Again <ul><li>How We Got Here </li></ul><ul><li>The Media Meltdown </li></ul><ul><li>Relationships Not Releases </li></ul>
  4. 5. The music Industries are at a cross roads
  5. 6. The three ages of digital music Free Paid Free and Paid Rapid rise of file sharing Modest rise of paid services Evolution of multi-tiered marketplace 1995-2002 2003-2007 2008-
  6. 7. <ul><li>Digital music has failed to meet three key strategic objectives: </li></ul><ul><li>Offset impact of declining CD sales </li></ul><ul><li>Compete with piracy </li></ul><ul><li>Generate a format replacement cycle </li></ul>
  7. 8. The 21st Century European Music Industry Will be Smaller and More Complex Than Its 20th Century Predecessor Music Revenues (billions) Source: Forrester Digital Music Model, 12/08 (Western Europe) Recorded Music Revenues €6.4bn Digital Music Revenues €4.0bn 2011: Music Market Begins to Grow 2007: Accelerated Decline 2001: Peak Revenues Total digital channel share in 2014: 57%
  8. 9. Music and the Media Meltdown <ul><li>How We Got Here </li></ul><ul><li>The Media Meltdown </li></ul><ul><li>Relationships Not Releases </li></ul>
  9. 10. The Four Phases Of Technology’s Impact On Media
  10. 11. Consumption is king as the distribution paradigm fades
  11. 12. And monetizing consumption is the ticket out of the Media Meltdown Current Media Landscape Future Media Landscape Media Meltdown High Low High Low Consumption based monetization Units based monetization Total revenues Total consumption Key
  12. 13. What do these have in common? ! They are both scarce, social experiences
  13. 14. An implication: physical is the new physical CD’s, downloads Gigs, concerts festivals e.g. Live Nation Movies Theme parks, theatres e.g. Disney TV shows Theatre screening based events etc. Print and online publishing Special interest events Established Physical Distribution Business Models Physical, Social Consumption Business Models Media Meltdown Weakens Core Revenues
  14. 15. Closed loop ecosystems are the success stories of paid content in the digital age
  15. 16. “ The great wines of France are not content providers to the glass manufacturing business” Andrew Lloyd Webber to the House of Lords, April 2009
  16. 17. Four Distinct Tiers of Music Services Built Around the ‘Four Cs’ of Digital Content More Less More Less Content More Less Implementation: release windows Convenience Implementation: discovery & DRM Cost Implementation: pricing & subsidies Premium Services Subsidized Services Free & ’Feel Like Free’ Services Community Implementation: forums, networks Same Same
  17. 18. Music and the Media Meltdown <ul><li>How We Got Here </li></ul><ul><li>The Media Meltdown </li></ul><ul><li>Relationships Not Releases </li></ul>
  18. 19. Music content should break free of the straight jacket of the album format leveraging new content assets Structured studio releases Live Backstage, Interviews etc. Multimedia, Interactive Content <ul><li>Formal album </li></ul><ul><li>Singles </li></ul><ul><li>EPs </li></ul><ul><li>Remixes & covers </li></ul><ul><li>Live concert streams </li></ul><ul><li>Recorded concerts </li></ul><ul><li>Live chat with artists </li></ul><ul><li>User remix applications </li></ul><ul><li>Interviews & outtakes </li></ul><ul><li>Merchandize & ticket discounts </li></ul><ul><li>Games etc. </li></ul>Content Sources Content Package (e.g. 18 months of creative output) Released via successive release structured ‘windows’ to multiple channel partners Route to Market
  19. 20. Single channel partners can leverage multiple release windows across distinct content offerings Release Window Preview Mainstream Pay ‘ Free to Air’ (Week 3) (Week 1) (Week 6) Comes with U2 Handset / Orange Tariff Comes With Music / Orange Tariff Orange Music Store Orange Subsidized ISP Bundle Consumer Product Bundles
  20. 21. “ The future is already here – it's just not evenly distributed” – William Gibson
  21. 22. The Music Industries are at a cross roads… … and one that requires careful navigation
  22. 23. Thanks [email_address]