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The future of music: creators, consumers, and the in-betweens (aka industry)

This is a version of the slides I presented at a talk I at the SKAP / DFAM event in Stockholm, Nov 28, 2013 see

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The future of music: creators, consumers, and the in-betweens (aka industry)

  1. 1. @gleonhard A futuristic outlook on the creator, consumer & the business in between
  2. 2. Most of what I am about to share with you is actually good news… Photo by Dr Case - Photo by Michael Cordedda -
  3. 3. Music: is Sweden (and Scandinavia) showing us the future?
  4. 4. E-M-P-O-W-E-R-M-E-N-T
  5. 5. Digitization ☯ Music Creators
  6. 6. @gleonhard Global Transformation driven by Digitization: When Products become Services and Experiences, the creator becomes even more crucial Product Service Experience
  7. 7. All media is shifting from protection to engagement Photo by WallStreet
  8. 8. Maybe this is a good time to… rights licensing across Europe? @gleonhard
  9. 9. Disembodiment of Media @gleonhard
  10. 10. The rapid disembodiment of music will force us to create a collective, EU-wide solution
  11. 11. Copying ☯ Listening @gleonhard
  12. 12. … the incarnation of this trend: mobile!
  13. 13. Value Axis The inevitable result of digitization: lower per-unit revenues - Offensive Innovation is crucial Potential ‘Digital Audience’ Revenue per 'Unit' 100 75 50 CD & Vinyl iTunes 25 Spotify 0 Pandora Youtube* @gleonhard
  14. 14. Music is not unique in this: massive consumer empowerment’s inevitable consequence is price reduction @gleonhard
  15. 15. As distribution becomes abundant, new things become scarce Abundance of ways to ‘get music’ New Scarcities: Attention Brand Relevance Context Timeliness Embodiment…
  16. 16. The Music Industry Curse: Ego Photo by Homies In Heaven -
  17. 17. Industrial & Mechanical ☯ Digital & Exponential Controlling Distribution ☯ Monetizing Attention Largely monopolistic EGOsystems ☯ Collective ECOsystems
  18. 18. “The greatest danger in times of turbulence is not the turbulence, itself, but to act with yesterday’s logic” *Peter Drucker
  19. 19. Many new value generatives i.e. a ‘Royal Family’
  20. 20. Digital Money is a certain future: not if butabout where…WHO No longer about distribution but when, attention
  21. 21. In large, hardwaredominated markets (US, UK, Germany etc), ‘fake ownership’ of music used to work - but fast decline is certain!
  22. 22. There is no long-term mass market for digital single downloads but mobile music and download-HD-to-keep as a premium product has great potential !
  23. 23. Fake Scarcity is misleading both the artists and the consumers
  24. 24. Managed dissatisfaction is not a sustainable business model *Reed Hastings, Netflix $ $ “Managed Dissatisfaction ” Image via
  25. 25. 43 Million subscribers in 23 countries: be irresistible!
  26. 26. Distribution as a key revenue driver or as competitive advantage is a ‘burning platform’ Image of BP platform via US Coast Guard
  27. 27. Distribution as a key revenue driver or as Brand & Audience is a ‘burning platform’ competitive advantage Image of BP platform via US Coast Guard
  28. 28. I am happy to pay cash (or data i.e. attention) for highly personalized, timely, social, meaningful, relevant, high-resolution content but it must be on 100% irresistible terms: simple, easy, fair
  29. 29. The message is clear: consumers want cheap, bundled or ‘feels like free’ access first, and will only then consider going further 2010
  31. 31. The ‘forced evolution’ of music Sell copies Sell Premiums License Access
  32. 32. Yes, we already have a model for this but the legal structure of music commerce must be transformed urgently
  33. 33. A €10 Billion recorded music market in Europe? 1€ per Internet user in Europe / month for basic streaming & offline service Approx. 600 Million Internet users in Europe x 12 = 7.2 Billion per year This would be 40% of current global recorded music earnings in 2012 The 1 € could easily be paid for by telcos / ISPs / portals (advertising) Up-selling to 10+ premiums could yield another 30-50% revenues Add another 400 Million mobile phone users…
  34. 34. Music is indispensable to the next generation media powerhouses …and these guys already see music as disembodied, mobile, cloudbased ‘added value’ …+++
  35. 35. Can Europe create a new digital music Ecosystem?
  36. 36. Music industry reset: think ‘Biosphere’ not ‘Myosphere’
  38. 38. We are at a pivotal point
  39. 39. The CD (physical media) is quickly disappearing in the rearview mirror: (em)brace ‘Managed dissatisfaction’ (such as iTunes) won’t make the pie bigger Beyond a doubt, streaming and ‘access’ is the new ownership: new laws needed! ‘Access’ may result in a 90% reduced ‘unit price’ but has x1000 audience We need digital music licenses that enable Billions of users to contribute $€£ Many new premiums can be offered on-top of ‘feels-like-free access’ The new (old:) ‘embodiment’ of music is the artist and the brand, themselves Social media, video, mobile (SoViMo) are huge opportunities: get engaged! In the EU, we need offensive innovation, real leadership and hyper-collaboration
  40. 40. Thanks for your time and attention... Now, let’s talk!