Digital distribution

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Digital distribution

  1. 1. Digital Distribution Cause and Effect WARNING :: Some of this presentation is MY OPINION...
  2. 2. Barriers to Entry
  3. 3. History
  4. 4. It Started With Music ✤ The music industry used to need an “OFFICIAL DISTRIBUTION CHANNEL” We used to call these folks, Labels.! ✤ With the advent of DIGITAL we no longer needed to get the music into a “brick and mortar” store. This led to DIGITAL distribution channels differences listed here...
  5. 5. 1998 - 2002 File Sharing Napster was the first widely! known “peer-to-peer” file! sharing network .....and on and on You can’t stop file sharing unless you propose a valuable alternative
  6. 6. Age of the Lawsuits ✤ The industry went for blood, labels suing technology companies, the RIAA targeting fans. The goal was to put toothpaste back in the tube ! ✤ 35,000 individuals were targeted by the RIAA for “illegal file sharing”! ✤ RIAA later modified to “Three Strikes You’re Out” policy! ✤ This strategy effectively made CONSUMERS the enemy and further strained the relationship with the fan
  7. 7. 2003 Apple Saves the Day The A-La-Carte Download Store DRM (digital rights management)! ! Music as a loss leader for a device! Margins Squeezed! ... but sales are up again
  8. 8. 2003 - 2008 Mimic what works A-La-Carte Download Stores ✤ Amazon! ✤ eMusic! ✤ Wal-Mart! ✤ 7Digital! ✤ TuneTribe
  9. 9. ... This didn’t fix P2P ✤ Peer to Peer sites continued to pop up. ! ✤ BitTorrent became a phenomenon that helped to protect the identity of the file sharer (multiple people sharing “bits” of songs)! ✤ The major labels / RIAA continued to file lawsuit after lawsuit to
  10. 10. As ISP Connections Improved This became a Movie and TV Problem… not just a Music Problem
  11. 11. Piracy Flourished
  12. 12. New Models Popped Up Advertisement Based Services AOL Music | Yahoo! Music The music is free, ! but you’re going to have to sit through ads! (hey, this sounds like something we’ve got already) Network TV Began Streaming Shows with Commercials! Cable Providers began “OnDemand” Services
  13. 13. New Models Popped Up Subscription - All U Can Eat (free or for a monthly fee) For a monthly fee you can have all the music you like! Lets do that with DOWNLOADS!!! What if we streamed the data over the Internet? .... or your cellular network
  14. 14. New Models Popped Up Subscription - All U Can Eat (free or for a monthly fee) For a monthly fee you can have all the video you like!
  15. 15. I prefer subscription.... ✤ Social Sharing Component! ✤ Both INSIDE the App! ✤ And OUTSIDE the App (www.facebook.com/music)! ✤ Apps! ✤ Mobile Streaming / Save Lists Locally
  16. 16. AND THEN PEOPLE COMPLAINED THAT THERE WAS! LESS MONEY IN THIS SYSTEM "There isn’t some God-given right to make millions from playing a guitar, it’s just lucky that there’s been a supply-and-demand thing for 50 years and now the supply is changing. The demand is still there, but you don’t have a right to get paid for every song you create. I value music very highly and come from a generation that’s used to paying £15 for an album, which seems like a fair price - £1 a song. But it’s a random amount in the first place. This generation is getting used to paying 70p for a song, or nothing. It’s a terrible shame, but it’s technology moving forward, as it does in every business. You can’t stop it." - Tim Rice-Oxley, Keane
  17. 17. Where do we go from here? ✤ The Major Labels (all THREE of them) have equity in Spotify! ✤ There is an added element of “SHARING” that traditional Digital Distribution does not.! ✤ It serves both MEDIA-FILES (who want the entire album) and CASUAL FANS (who want singles here and there)
  18. 18. What Are Users Looking For? ✤ In the decade since Napster’s launch, digital music consumers have demonstrated their interest in five kinds of “free” selling points: ! ✤ 1. Cost (zero or approaching zero),! ✤ 2. Portability (to any device),! ✤ 3. Mobility (wireless access to music),! ✤ 4. Choice (access to any song ever recorded) and! ✤ 5. Remixability (freedom to remix and mashup music)

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