This document discusses how digital technology and the internet have disrupted the music industry. It notes that revenue from recorded music in the US peaked in 1999 and has declined significantly since then. It also discusses how platforms like YouTube, with over 1 billion daily views, and streaming services like Spotify and Pandora have become the primary ways for users, especially teens, to access music. These platforms have changed consumer expectations around immediacy, personalization, and not having to pay for individual songs or videos. The future of the industry is focused on live performances and merchandise, as well as new models like subscriptions, self-distribution, and brands sponsoring artists.

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25. http://www.tastefullyoffensive.com/2012/11/w
hy-mtv-doesnt-play-music-videos-anymore.html

26. • Revenue from recorded music in the U.S.
amounted to $7 Billion in 2011, less than half
for the industry at its peak in 1999 (RIAA)
• Apple said this week that its iTunes store had
sold its 25 billionth song

27. • All this points to the leveling effect of digital
technology, social media, and everything else that
blew up the old industry
• In 2012, the compact disc continued its long
decline, with sales down 13% from last year, and
down 70% from 10 years before (SoundScan)
• iTunes offers 28m songs, Spotify 20m, MOG 16m
vs. Amoeba 250k records
• HD audio coming

28. THE INTERNET HAS PERMANENTLY CHANGED
USER BEHAVIOR AND CONSUMER
EXPECTATIONS:
• PERSONALIZATION
• INTERACTIVITY
• IMMEDIACY
• COMMUNITY
• FREE

29. • Nearly 2/3 of Teens use YouTube as their
primary music source according to Nielsen
• With 1 Billion views daily, it’s now the biggest
global audio/visual platform
• Universal Music Group #1 Ranked Most
Viewed Last 30 Days with 573,037,596 views
• Vevo #1 Network with 1.8B
(tied with Machinima)

30. AT FIRST, NOT PEGGED TO BIZ MODEL:
• NO CHARGE, FINANCIAL REWARD FOR CONTENT CREATION
• LACK OF BARRIERS TO PARTICIPATION
• DOMINANT RECORD DISTRIBUTION MADE IT HARD FOR
PEOPLE IN INDUSTRY TO THINK AUDIENCES WANTED TO
CONSUME CONTENT IN A DIFFERENT WAY
• A PLATFORM DOES NOT MAKE ANY ASSUMPTIONS ABOUT
HOW PEOPLE ARE GOING TO USE IT
• YIELDED DISCOVERY OF NEW PATTERNS OF ATTENTION
AMONG AUDIENCE BEHAVIOR RATHER THAN BUSINESS
POLICY

31. ABILITY TO INTERACT WITH AUDIENCES KEY TO YT’S
SUCCESS:
• INITIAL MODEL TO BUILD AUDIENCES AROUND
NICHES WHETHER DUBSTEP OR MAKEUP
• THE AUDIENCE TURNS INTO USERS
• USERS TURNED INTO CREATORS
• THOUSANDS OF CHANNELS NOW ABLE TO FIND
THEIR AUDIENCE AND BUILD CONTENT
SPECIFICALLY FOR THAT AUDIENCE

32. • JAMAL EDWARDS SB.TV HAD 144M CHANNEL
VIEWS WITH £200K IN REVENUES 2012
• ALEX DAY 500K PAID DOWNLOADS
• LUKE HOOD UKF BASS CULTURE
250K ALBUMS SOLD

33. • WHO NEEDS A LABEL NOW?
• FREEMIUM MODEL WITH VOLUNTARY
TRANSACTIONS
• “PATRONET”
• http://www.techdirt.com/articles/20090201/1
408273588.shtml

34. • As an alternative to downloads, streaming
music is gaining, served up in various styles by
services like Pandora and Spotify
• Even Myspace is back, having recently
relaunched with a clean interface and a
mandate to siphon music fans' loyalty from FB

35. • Share of total US radio listening now stands at 8.03%, an
increase of 5.55% with 1.39 billion listener hours
• Platform’s monthly music metrics for Jan 2013 show
listening hours increased 47% - up from 952 million during
the same period last year (Hypebot)
• 65.6 million active listeners at the end of January, an
increase of 38% from 47.6 million (YoY)
• Current strategic focus is to grow car listeners (only 1
million now)

36. • Sweden, home of Spotify, saw overall recorded music income rise from
just over SEK 829 million (£79.82m) in 2011 sales to over SEK 943 million
(£90.8m) in 2012
• Overall 2012 Swedish music sales increased 14% with 90% of all digital
income coming from streaming services
• Digital sales increased to 63% of total music sales, up by 12% compared to
last year
• 90% of these digital sales come from streamed music services (82% in
2011) while 10% are from other internet services (18% in 2011)
• Album sales account for 35% total music sales
• Sales of physical albums decreased by 15% in 2012
• Of the total music sales, 40 percent are Swedish performers and 60
percent are international performers
• Vinyl sales increased by 59% in 2012, but still represent just 1.4% of total
music sales

37. There is no music business model in the future?
Then what?
• Artists will expand selling direct to fans
• Pledgemusic.com Kickstarter model for music
• Brands will sponsor artists for distribution and
product placement

38. Now, the only money left for labels is the live
music performance and merch business:
• Will Live Nation is the WalMart of the
business?
• More than ½ of 2012’s top 10 highest-grossing
concert acts qualify for AARP membership
• Can touring industry find new sources of
revenue and survive Baby Boomer Bust?

39. • APPLE starts streaming iTunes
• Alternative radio becomes mainstream
• The per user model has replaced the per unit
• The only future proof asset:
The fan relationship

40. • SUBSCRIPTION
• MUSIC SEARCH ENGINES
• APPS (DISCOVERY, SHARING)
• SOCIAL RECOMMENDATION
• SELF DISTRIBUTION
• PIRACY
• GENERATIONAL SHIFT IN CONSUMER
BEHAVIOR & EXPECTATIONS