The New Music Economy: Music 2.0 At Picnic 2008 Amsterdam

Gerd Leonhard Media Futurist

Music 2.0 -a new, web-native music business

Presentation at Picnic 2008 September 25, 2008 Amsterdam

[email protected]

www.mediafuturist.com

www.music20thebook.com



Source: Flickr hillarylmrore


Music is now (again) a

Social Medium

Source: UniversalMcCann waves report


Music 2.0: a networked, web-native, de-centralized Music Business.


This is ... Not.

Gerd Leonhard Media Futurist Goodbye ‘Copy = Money”The The Western Definition of Copyright as Sole Value of Music is dead


http://flickr.com/photos/hollyleigh97/


The future source of income is Getting Attention


This is not a battle for getting people’s money but a battle for their Attention


For Creators,Obscurity is a much greater threat than

so-called PiracySource: CEA


A web-native music business model...?Based on flat-rate access first, then Copy

Based on Usage Rights, not (just) Copyright

Based many revenue streams selling-copies

Driven by Sharing, User-to-User

Driven by Syndication (Widgets!)

Decentralized

Powered by next-generation Advertising

Multi-platform access but mostly mobile!


T h e r e s u l t o f t h i s e x p l o d i n gB r o a d b a n d C u l t u r e :


Does strong copyright and strong protection really equal strong income?

Gerd Leonhard Media Futurist Stop this?


You can’t really ‘own’ the copy any more but

You can own the Context, the Meaning, the Relevance, the Experience, the Embodiment, the Timing...


Asking the ISPs to deep-

package inspect their traffic

and then enforce the rules of

an industry that has utterly

failed to adapt their business

model, is asking for

Censorship


Wanting to disconnect people because they

download music & other ‘content’ is wrong.

Criminalizing 90% of the population because of

a lack of a new model to serve them is wrong.

Exploiting market weaknesses to withhold music

licenses is wrong, and so is ruthlessly

capitalizing on one’s market position

Using copyright as an excuse to extort the users

and the organizations that serve them is wrong

Let’s face it: this is wrong


Instead of Control, Trust is the key to success in a Networked World

http://www.guardian.co.uk/media/2008/apr/21/netmusic


This is a very serious change

Copy Economy

Access / Usage / Share

Economy


If you insert Friction you insert Defeat


Goodbye ‘Consumers’ as we knew them


Welcome: The digital Music Flat Rate


Old ‘paying logic’

http://www.repmanblog.com/photos/uncategorized/48750_a.jpg

Gerd Leonhard Media Futurist New paying logic


Music

Used to be


Music

...is & will be


Our Future as Creatives: Attention-based Income explodes while Copy-based income declines *for now

0

2.5

5.0

7.5

10.0

WasIs

SoonNear Future

Mid-term Future

Copy Based RevenuesAttention Based Revenues


And a flat rate is just the beginning!


And once 4 Billion phones are connected


So why isn’t Google licensed for music yet?


Let’s start sharing in the new revenues!

Start giving PERMISSION


Now,we must ‘sell’ things

that can’t be copied


The industry has to offer a real, feasible license

to the networks, and enable a Flat Rate that

legalizes the ubiquitous use of music.

If there is no voluntary collective we may

need to enforce its creation.

If the ISPs are forced to unplug people maybe

we should unplug the industry, too?


Yes, there are many issues, but:

The evils of ‘too open’ or ‘too much

freedom’ will always pale compared

to the evils of closed, central,

controlled and authoritarian system


Let me tell you a story about China, Google and Music


SHANGHAI, CHINA, August 2008:

Google has launched a free music search service in China that will give users access to free downloads of songs, while capturing advertising revenue for music providers in a market already infamous with piracy.

The service poses a challenge to Baidu.com, the #1 search engine in China, along with other Chinese search engines, faced lawsuits charging that it facilitates copyright violations through downloads of unlicensed music.

Google said its service would initially let Internet users search tens of thousands of Chinese songs on its website and download them Top100.cn... Advertising revenue from the service will be shared among Top100.cn and Google’s music partners aiding in the search.

Google Music in China

Source: Reuters / Information Week


“The Internet industry should by no means stand in the opposite camp against the music industry. Google always believes profoundly that mutual interest, rather than monopoly, is the key to sustainable growth,” Google China president Kai-fu Lee said in a statement

A Creative Economy based on ‘Mutual Interest’ ?


Establish open, access & usage - based content licenses

Very large, engaged, always-on audiencesLow-cost, ubiquitous, mashed-access, mobile broadbandTelecoms that will become content & service pipesLarge Brands (and their agencies) that must reinvent their marketing and advertising strategiesPremium Content as well as UGC unprotected, unlimitedTrusted opt-ins and flexible privacy provisions

A Recipe...?


The Model

Find the many

Make it ‘feel like free’Charge the few

Up-sell the rest!


Kevin Kelly: The key is to offer valuable intangibles that can not be reproduced at zero cost, and will thus be paid for:

1. Immediacy - priority access, immediate delivery 2. Personalization - tailored just for you 3. Interpretation - support and guidance 4. Authenticity - be sure it is the real thing? 5. Accessibility - whereever, whenever 6. Embodiment & Experience 7. Patronage - "paying simply because it feels good" 8. Findability & Curation


"When The winds of change are blowing, some people are building shelters, and others are building windmills." Chinese Proverb


Gerd Leonhard

[email protected]


www.music20book.com

Thanks for listening!

Technology

The New Music Economy: Music 2.0 At Picnic 2008 Amsterdam