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Futurist Gerd Leonhard’s Best Writings and Blog Posts (2008) U.S. letter size Version 4
www.mediafuturist.com gleonhard@pobox.com
Please note: compared to the original versions that were published online, some essays and postings have been slightly
updated and / or edited for more accuracy, and some images have been exchanged for various reasons. The images
used in this compilation are either sourced via iStockphoto, via Apple Keynote Animations or via Flickr (as indicated), or
are created by the Author, or are in public domain.
December 11, 2008 10 quick ways to reinvent Print Media (newspapers, magazines)
I have been reading Chris Brogan's great post on how to improve blog-writing, and today I am implementing just one of
his wisdoms: keep things short. Reduce. Cut the fluff. Yes, well, alright: I have been guilty of not doing that (you may have
noticed). Enough.
Here are 10 ideas for future success in what used to be called Print Media (i.e. newspapers & magazines etc):
1.
Decentralize your digital assets. Syndicate your strong content everywhere (and in niches, in particular!), offer full
feeds, on all platforms (mobile being the top priority), make everything searchable. Finding and being
found is what will make or break you. Distribution trumps destination - it's no longer just your
homepage that counts; it's all those other doors, links, tags and tweets to your content - even if they
are not yours!
2.
Participate rather than be participated. Give permission for your content to be used, accessed,
blogged, remixed, forwarded. Every ounce of protection aka friction will pull you further down to the
bottom of this new ecosystem. There is real money in permission - and there is zero money in en-
forcing the laws that may have protected your dominant position in the past.
3.
Micro-chunk. Fragment and re-aggregate. Send your content headlines out via Twitter and other micro-blogging
platforms. Allow people to snack, have a light meal, or pig-out and gorge on your content. Offer all options. Slice
and dice your goodness.
4.
Mobilize....totally! Offer your content via mobile apps (and please, not just on the iPhone) that are easy to use,
with simple UIs and strong functionalities. You may find you can sell the apps even if you can't sell the content,
initially. Most of the future value may just be around the content, not just in the content.
5.
Integrate the bloggers, the people formerly known as consumers, the professional-amateurs and UGC. The NYT
has some very good initiatives in this turf, and so does Wired (check out their blogs and How2Wiki)
6.
Engage. Engage again. And then engage some more. Talk to your readers i.e. users, get them talk to each other,
and offer a unique and powerful platform for these conversations... around your content. Aggregate the conversa-
tion. Bundle it. Wrap it.
7.
Filter. Curate. Contextualize. Inter-connect. Make sense of things. We, the users, need this more than ever and
we will pay you to filter for, with and even through us!
8.
Personalize and customize. Allow me to be me when I spend time with you. Allow me to widgetize, change my
profile, look and feel, make your assets mine. Inject a bit of Netvibes and iGoogle into your pages.
9.
Connect me to 'strangers like me'. Don't stop at making connections only between yourself and me - also connect
me to your other users that might be of interest to me, that might generate added values for me; again,
using your platform. Amazon has this down to a science!
10.
Dive into Freemium models. Give me something for free that represents real value to me,
but costs you very little. And please, upsell me from there - to all the other good stuff you have to offer. See:
Flickr, Google, Skype.
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Short enough? Tell me. Comment below or Tweet.
December 10, 2008 4 reasons why we will start printing a lot less in 2009, plus: mobile reading is here!
Remember when we thought that the Internet was going to bring us the paperless office, and a 'greener' new world that
would not rely on printed information at all times? This has not really happened yet but in 2009 this concept may finally
become a reality for many of us. Looking around at what me and many of those clued-in people in my network do, I see
the following trends:
1) Offline web-page and article reading. A lot of people will start reading their web-pages, RSS feeds and blog posts via
new offline reading apps such as Instapaper (which I really love - check out their blog, here, *iPhone only), Read-it-later
(very cool FF plug-in, just started using it, seems promising), the ubiquitous Google Reader (works on most mobile de-
vices, and syncs great offline, too; with the amazing Google Gears engine), Opera
Mini on my new E71 (supposedly offers offline reading), and many other cool apps
that are becoming available for mobile devices (those small shiny boxes we used
to call notebooks & computers;) right now.
Remember when we all had to print those top stories from all those feeds and
sites we like so that we could read them on the plane, or in the train or taxi?
Well... no more. On my end, I used to print 100+ pages per day (yes, sorry), and
that's gone down to less than 10 now; thanks to Instapaper etc. Great!
2) Mobile apps courtesy of your favorite newspapers and magazines. If you are into reading
those good old mass media newspapers and mags (no worries, I am, too!) now you can make
use of some nice new apps that allow you to read them on your mobile phones. Sure, it feels dif-
ferent, it's rather smallish and obviously lacks the physical paper user experience, but it works
well; it's free and first of all it's always there. Right now, mobile newspapers apps are available
mostly for the iPhone - but this is changing very quickly.
I reckon that within 6-9 months we will see these apps become available for almost every mobile
platform and OS, since this added value is indeed a major reason to buy a new smart-phone.
Right now, my favorite is the New York Times app for the iPhone - it's well done, easy to use,
does not crash, and gives me almost everything I need from the NYT (apart from that good old
paper feel and smell;). I also like the AP news app (iPhone and blackberry)
So say goodbye to buying a 3-day old NYT at some airport shop in Europe and stuffing it into my
briefcase along with my blog post print-outs (see above) - another nice time-saver, waste re-
ducer, and minor money-saving accomplishment. And what's best for the NYT: I keep paying at-
tention to them, and I won't be surprised if they ran customized ads on their apps, soon, too. Plus:
I still buy the 'real' dead-tree NYT if I want to enjoy a more leisurely read. They've kept me as user, and that's what counts.
3) Reading entire books on your mobile device. Again, the iPhone dominates in this turf right now, as well, but this will
change quickly. Wired has a good wiki on iPhone reading apps, btw. I don't use a lot of these apps yet, mostly because
many of these services use bizarre copy protection schemes for their fairly limited range of eBooks, they don't have the
books I want to read, and the publishers charge prices that will make you wonder if they want to punish you for trying out
eBooks (hey - sorry, I thought that it's actually a lot cheaper not having to print and not having to ship anything - guess I
was wrong). The leading apps include bookshelf, stanza (which I have), ereader, feedbooks etc - here is a good list.
Again, for me, reading entire books - rather than just essays, PDFs, blog posts or articles - on my mobile devices i.e. cell
phones is still a very tough interface challenge; therefore I prefer to buy the print edition and haul it around (especially if
the eBook price is still very much the same) - but my hunch is that this will change in 2009, too. Maybe not for fiction,
though - but for business books I can imagine it.
4) The coming boom in electronic readers such as the Kindle and, maybe, the new Sony Reader (the PS700 BC)
which I just bought but have not received yet. It does sound very promising since you can read PDFs with it, bookmark
paragraphs or pages and keep it running for weeks at a time.The Kindle is, sadly, not available here in Europe (due to
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mobile network issues I would think), so I haven't tried it, but I keep hearing good things about it; apart from people
complaining about its design. Summary and 2009 predictions:
Many of us will print a lot less, next year - and that's already a great step
Most manufacturers of smart phones and mobile computing devices will get seriously into supporting or integrat-
ing all kinds of reading apps (web-page / offline, pdfs, feeds, newspaper apps, book apps), and will therefore also
beef up their UIs, as well. And we will use them! Next step: Google.edu?
The next generations of eReaders will actually be usable for more than just a few of us - another 2 years and they
will become mainstream.
A $ 92 Billion industry (ink, printers, paper etc) will probably shrink as a consequence. Talk about disruption!
Printer manufacturers and ink suppliers will start to feel the squeeze in 2009; people will still buy printers, of course, but
probably a lot less ink, and much less paper. And, shrinking profits aside, I think that's a good thing.
Now, what this will do to the publishing business... another story, another post!
December 09, 2008 Wired: 3 Major Record Labels Join the 'Choruss': Jim Griffin brings Music Like Wa-
ter in 2009?
One of Wired's sharpest minds, Eliot van Buskirk, reports Three Major Record Labels Join the 'Choruss'.
"U.S. universities are getting a glimpse at a plan that would build a small music-royalty fee into the tuition payments they
receive from students. If successful, the model — proposed by digital music strategist Jim Griffin on behalf of Warner Mu-
sic Group — could be expanded to make ISPs the collector of such micropayments, eliminating some of the most irksome
and contentious issues dividing the music industry and its customers...Many experts believe the original Napster repre-
sented a major opportunity for the labels to monetize file sharing in a manner similar to the way performance royalties are
collected from restaurants or radio stations and avoid further alienating their customers by hauling them into court..."
I am, of course, delighted to hear that this is happening, not just because Jim Griffin (now working at WMG) is an old
friend and fellow digital music industry catalyst, but also because this kind of a deal - even though it is
still very early and a 'covenant not to sue' is not the same thing as a real, voluntary or even compul-
sory blanket license - can really show the way towards solving the 'problem' of what those pesky
digital natives want as far as their music consumption (better: engagement) is concerned.
If anyone can do this, and work with both the major labels and the students / fans and universities, it
will be Jim Griffin! Naturally, the Net is now buzzing with comments such as 'this is a music tax' and other,
similar misunderstandings, so I hope to be able to join this debate in the next few weeks.
A similar discussion will happen at MIDEM, one of the leading music industry conferences, in Cannes / France (January
17-21), and I will be presenting on this topic during the annual MidemNet event (details here, Midemnet blog here). My
Music 2.0 slideshow, below, is embedded again, for your perusal and download - but please talk back, or tweet
something.
Techdirt's Mike Masnick has a comment on this topic, here, btw, saying that this conversation should be public - I like that
idea, as well (but realize where the problem with that lies, too ;)
One more snippet from Wired which is important: "A Wired.com poll showed that approximately 70 percent of readers
would pay $10/month for legal access to all of the music on the internet, and we understand that Choruss would call for a
significantly lower fees than that. Its detractors might be underestimating the consumer appeal of an inexpensive, unlim-
ited
December 07, 2008 Via Jack Myers: Print Media Face Staggering Challenges for the Foreseeable Future
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This Huffington Post column by Jack Myers is a must-read for anyone in the 'content' business, media an publishing: Print
Media Face Staggering Challenges for the Foreseeable Future. Jack is presenting some very hard-hitting stats that are
worth sharing here (and that speak for themselves):
"Yellow Pages will dip in 2009 below their 1998 revenues of $12.1 billion. Myers Report (www.myersreport.com) projects
Yellow Pages advertising will decline 12 percent in 2009 and 6 to 10 percent in 2010...All print media are struggling with
the same reality. While some magazine publishers are moving quickly to identify and invest in alternative revenue
models...the magazine industry for the most part remains dangerously dependent on traditional print advertising revenues
that are eroding at a rate even more dramatic than Yellow Pages' ad revenues" "Consumer magazine ad revenues will
decline 12 to 15 percent in 2008 and even more in 2009. ....the realities are that print-based media are on the decline"
"Newspapers, which do not reap the benefits of high engagement scores (except among Hispanic and African-American
readers), are at an even greater disadvantage. In 2001, according to Myers Report, newspaper advertising revenues were
$49.2 billion. In 2010, they are projected to be only $28.5 billion, a 42% decline. Consumer magazines are projected to
decline in ad revenues from more than $14 billion in 2005 to $10.3 billion in 2010..."
If this is not a call for action, now, I don't know what is. I am working on a longer blog post on what I think could be done to
re-invent the print media business - look for this to pop-up on your RSS feeds and Twitter feeds sometime next week.
In the meantime Jack sums it up quite succinctly: "But for the print media industry as a whole, there is a pressing need to
adjust to a new reality. There are solutions. There are opportunities. But if management fails to quickly and dramatically
heed the clear warning signs of both economic and systemic, secular dangers to their core business, the reality of extinc-
tion will face them sooner than they imagine"
December 06, 2008 7 reasons why everyone in the music industry should try Twitter
A lot of people ask me why I am so seriously into Twitter, why Twitter matters, and why I recommend that every music in-
dustry professional should give it a try.
First, for the still-uninitiated: what is Twitter?
It's a so-called micro-blogging service that allows you to send up to 140 character messages (called Tweets) to people
that 'follow you', both on the web as well as on the mobile phone. It all started out with the trivial question "what are you
doing right now" - and believe it or not, millions of people started sharing those kinds of messages (e.g. 'drinking coffee at
Starbucks on 46th Street') with each other. Today, Twitter has some estimated 5-7 Million users (and traffic of 30 Million+
uniques per month), and people are sharing ideas, links, news, videos, books, tour-dates, pro-
gram updates, record releases etc with each other. All this updating is generating a huge flood
of calls & responses (I sometimes call this 'the river') which is - ADD effects aside - starting to
become a very important new way of marketing and promoting something (sharing is caring,
remember?).
Ok, ok, I know: who has the time for this? But trust me: once you know how to juggle things like Twitter, you'll see first-
hand what it does, and your time-wasting concerns will evaporate. You really do have to get wet to swim!
All you need to do is go to Twitter.com, sign up for a free account and start following people (here is my list of people that I
follow, for starters) and post a few things every day. For handling Twitter traffic and pings I use Tweetdeck which is a great
free software app that makes the Twitter user's life a lot easier. If you want to know more, here are some resources: Video
on Twitter for Business (OReilly Webcast), video: Twitter in plain English
So here are my thoughts on why everyone in the music industry (really!) should get busy with Twitter:
1) It teaches us the meaning of Conversation - and we need to learn that, urgently. If you don't tweet anything good (i.e.
post relevant messages) nobody will follow you, and if you don't respond to messages people will stop looking at your
tweets, as well. In 2009, the tweets of the top-twitteratis may well become more influential in this industry than anything
that Billboard or MusicWeek will write so ...get ready. But as far as marketing our artists and /or services is concerned,
Twitter indeed offers a crucial lesson for all of us in the music business: stop pushing, start talking. Broadcast less, micro-
cast more. Stop the monolog and start the collaboration. Win by attraction not Control.
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2) Instead of email, use Twitter to transmit news and updates to people: it's a lot less work, you can do it as often as you
want, and nobody will complain about spam. Think of Twitter as your own, free SMS broadcast service. Example: Artist-
shouse Music
3) People react very quickly to what you post on Twitter - the more followers you have the quicker you can get your mes-
sage out there; and with real, tangible results. As an example, when I posted the fact that those cool new Macbooks have
DRM'ed displays (!) I received several responses within 2 minutes from people that thanked me for warning them - they
were just about to buy one! This is a great example for the power of the Twitter network - imagine this (hopefully the other
way 'round) for a new video release by an artist you are trying to promote [I still did buy that new Macbook btw!]
4) Twitter really does create that direct connection, for free, between you (the artist, the label, the writer, the publisher, the
agent...) and the people formerly known as consumers, the fans, the users - all you have to do is start the conversation!
5) Twitter is a great new way to monitor the buzz online, whether it's new record releases, music recommendations via
blogs, the discussion around MIDEM :), music industry news, what Nettwerk Music Group is up to, the death spiral of CD
sales, or the best sushi in London ;) I use this way of 'social searching' all the time, and it has opened up a world of new
resources for me.
6) If you are using Twitter on your mobile phone (I use Twitterfon on the iPhone, and the OperaMini browser on my Nokia
e71), you can use your Twitter network of followers to source stuff on-the-fly while traveling, incl. last minute tech-help and
ad-hoc meetings or local hotel or food recommendations. I have tried it, and if enough people are following you, it works
out great.
7) If you think that Twitter is just for timewasters and geeks, you are dead wrong - everyone is getting on twitter as I write
this - traffic is exploding, and major brands are coming aboard. Even plants are now on Twitter, too! But seriously: Twitter
is gearing up to be a fantastic marketing tool for social media 'products' such as music - and we will see a veritable explo-
sion of twitter-charged successes in 2009.
My bottom line: get on Twitter now, and start tweeting - let's see who can contribute some success stories when we meet
at MIDEM in January. Cheers, Gerd Leonhard
December 05, 2008 Pandora's iPhone success - showing a path to an ad-supported, mobile music future
Some readers may recall that the very existence of Pandora, one of the biggest next-generation, personalized digital radio
platforms was recently seriously endangered by the threat of having to pay outlandish and retroactive music licensing fees
right after having been kicked out of Europe (also for similarly bizarre licensing reasons). Now, thankfully, a report reveals
that Pandora has gained an even bigger (albeit only U.S.-based) audience by launching a free iPhone application that is,
you guessed it, entirely supported by some apparently quite smart advertising. I wish I could see for myself but since I am
in beautiful Switzerland I have been barred from the pleasures of Pandora - after all, why would the music licensing or-
ganizations even bother with Pandora's international users... right?
But anyway, what is so great to hear (see the press release) is that ad-supported music seems to work so very much bet-
ter on the iPhone (and soon, many other mobile devices, I would hope) than it does on the good old computer - this, I
think, holds great potential for the future of ad-supported, free or feels like free + freemium content on mobile devices.
First music, then films / TV, then books (and games.... yes, of course: already there!)
A quote from the press release (December 4, 2008) sums it up very nicely (even if we remove the few instances of PR
hype): "Since September 22, when Pandora began marketing its iPhone platform to marketers, it's had a steady queue of
the biggest national brands anxious to deliver their ad messages to iPhone mobile users with Pandora as the conduit. The
first advertisers to launch on Pandora's iPhone application were Best Buy and Beck's, followed by a list of other top tier
brands such as Target, HP, Nike and Kraft Foods. To date, Pandora's iPhone ad platform has delivered over the twice the
response rate as its other ad products due to the highly interactive nature of the device. Additionally, iPhone users can
continue to stream music while they engage with the ad so the user experience is not diminished in any way"
Here is the key, in my view: it's all about the INTERFACE. The USER EXPERIENCE. That is what is so great about the
iPhone (after all, it's really a lousy phone, in my view, but a great mobile computer and communication device), and that's
what's so great about Pandora, too. The sum of the two really makes it tick, I guess. Next destination: Nokia?
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I think users will pay to use the Pandora interface, the functionality, the build-in community features; and advertisers and
brands will pay to align themselves with those tens of millions of keen and open, interested and fast-clicking users. And
yet other users would probably pay to have Pandora without ads, too!
Now (add: sound of broken record) if only the labels, publishers and rights societies could actually allow them to make this
work, economically - then we would have something that would show a real path to a
mutually beneficial future; a future that will create many of those 'New Generatives' that
Kevin Kelly writes about, and a future that is based on true collaboration in an open
ecosystem.
Here is an another interesting fact from the release: "Currently, Pandora's iPhone users
spend an average of 90 minutes a day interacting with the application, accounting for
nearly 1.2 million ad impressions per day..." This is pointing us straight to a future rec-
ipe of success: great interface + supreme ease of use + great content + great commu-
nity features + freemium + ads2.0 = Success.
Pandora reaches roughly one in every five iPhone users in the U.S., already (and is set
to have 20 Million users by the end of the year) - so what would happen if the music
industry took the lid off, and allowed them to broad/narrow/micro/social-cast worldwide,
on the iPhone, the new N97 and Nokia's Ovi enabled phones that are coming down the
pike, 3's Facebook phone, Google Android Phones...? You tell me.
December 04, 2008 6 survival tips to prepare for a tough 2009: time-wasters will become life-savers
I have recently been getting a flood of requests from clients, my social network 'friends' and my blog readers to talk about
what I could recommend as far as surviving (or even prospering) in the current economic downturn goes. As most of you
know, I am not an economist or a financial expert, so instead of talking about markets, money, restructuring and ROI I fig-
ured I would talk about how to build an audience around your brand, and how to use that audience and the Internet's juice
to capture new opportunities for yourself and your company. Here it goes:)
1) Network Network Network. This is the time to tap into the power of the crowd & the cloud. 2009 will be the year that
everyone - no matter what business they are in and what current position they have - will seek to connect
with like-minded and highly selected people using social and business networks, from LinkedIn to Xing to
Facebook and many other ones. We will also see an increasing blurring of the lines between social and
business contacts, as well, as business matters become even more completely and publicly intertwined
with who you are, as a person. However, the actual networking platforms are likely to remain purpose-
specific (which is what I really like about LinkedIn, btw) but we will use several different services at the
same time, segmenting our network and contacts accordingly. On my end, I am keeping LinkedIn connec-
tions limited to people I have actually met, face to face (mostly), Facebook is where I tend to be more
open and accept most connections (but not all, either), and Twitter is wide open, for me.
Maintaining business and personal relationships in an open, transparent yet careful and individual way will soon become a
crucial reason for if and why we get asked to join a project or to work with others, or not. It is already common practice
that we check each other out on LinkedIn before we even commit to a meeting or a phone/skype call, and this will of
course increase in 2009. Never mind plain old Googling; if you are not listed on something like LinkedIn, if you're not visi-
ble and commented-on in some peer-generated way, if you don't have a site / blog / feed / profile, and (to a lesser extend)
if you don't use Twitter or in some other way share your 'river', in many cases you just won't be considered. It's being part
of the Tribe (as Seth Godin likes to say) that is starting to matter more than ever before. So get connected, get the net-
work humming, and join the tribes that are in your areas of interest.
This trend will become even more pronounced with the new Open Social, Google and Facebook Friend Connect offerings:
You will do a lot more business if you are connected to the right people (this sounds like verbiage from the 50s... but it's
true!), and if they are connected to you, and these platforms will make it even easier. Soon, however, it's not enough that
you are just part of a network, but what you will actually do there.
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So, here is my advise for getting ready for the battle of 2009: spend some time on building high quality profiles, inviting the
right people, networking with your peer groups, and building your social capital. What looked like a major time-waster
when I first got involved (i.e. LinkedIn back in 2003 I believe) has now become a true life-saver - we all need qualified and
pre-approved connections that we can easily use when push comes to shove, and this is one of the best ways
to do it. Lastly, give yourself a nice Christmas present, buy Yochai Benkler's book "The Wealth of Networks"
- it rocks.
2) Show people who - what - where you really are. This trend is becoming more pronounced every single
day: if you don't publish anything about yourself, who you are, what is special about you, what you stand for,
and yes, what you may offer, sell or provide, nobody will care about pinging you in the first place. Today, if you
are '404'-person-not-found on the Net, it usually means one of 3 things: a) you live in one of the few remaining, so-called
developing countries that has not yet been uprooted by the Internet b) you are a bona-fide but under-the-radar VIP and
are thus exempt from any such trivial need for self-presentation c) You apparently haven't done anything worth mentioning
in the past 5 years - at least this will be people's perception when they Google you!
In either case, a total lack of any content about you (or your company, your project or your creations) is already enough to
make most more connected people suspicious, and this trend will drastically increase in 2009. No network, no 'friends', no
comments, no links - and many people will feel reluctant to do business with you. This is the new power, and maybe also
the curse, of the paradigm of hyper-transparency.
So how to show people who you really are? My recipe: publish stuff that you care about, content that's personal, unique
and different, such as updates on your social networks, book reviews on Amazon, Flickr pictures from your mobile phone,
playlists from last.fm, Ovi (Nokia) sharing updates, blog posts, comments, videos... whatever you feel most inclined to get
involved with. Does it take time? Yes, but guess what: this new process of sharing will actually grow on you, and these
previously considered time-wasting activities will become an important part of what you do. Suddenly, what once looked
like seriously wasting time starts looking like a good investment: a powerful network may yet spring from the wasteland of
bizarre tweets, bad blog posts and random Internet friending - we just need to learn how to juggle it all a lot better. Just
like 10-12 years ago, when email was often considered a waste of time and it was mostly geeks that had an email ad-
dress - now it has become the essential tool for business communication. No email, no pings, no business. In 2009, it will
start to become just the same for social and business networks. And yes, soon, email will really be for old people ;)
3) Have real conversations. In 2009, you can stop pushing yourself, your products and your marketing messages via
email, newsletters, snail mail, phone calls or print ads; and you can stop yelling at people to get them to pay attention to
you. Start pulling them in by being part of conversations, by adding value to something that exists al-
ready. Show people that you care about an issue or a topic, signal that you have something of value to
give, and they will ask who you are and what you do, and invite you to show them your goodies.
Broadcast less to the masses, and start narrow-casting to the ones that actally want you (this, btw, is the
Future of Advertising, in my view). If they don't yet know that they should want you, show yourself and
your value in an irresistible way: give something of value, for free. Add value and get value.
Cool down on the monologue (ouch, yes, I should be talking!) and get into 'duo-logs' i.e. conversations.
Yes, this is really though; but the times of winning-by-sheer-dominance, of closing a deal because of sheer force, of 'I talk
you listen', of monopoly of attention are coming to an end. In the future, you simply won't be hired if you can't talk with
people, if you can't listen, if you can't attract rather than force, whether you're a lawyer, a CEO, a marketing exec or an
artist. This is what I like so much about Twitter, btw: I can have real conversations with people, as microscopic as they
may be. I can check them out very quickly, by looking at their links, and their followers etc, and I can get as engaged as I
want - but it's all out in the open.
4) Don't think Money - think Attention, Trust, Merit (Money2.0). This is crucial: the new cur-
rency in this hyper-connected economy, is Attention and Trust, based on Merit. In other
words, if what you do is good, if it has value, if it maintains that value, over and over again,
and if you can get attention repeatedly (by publishing that value in the right context), and if
you can get people to trust you and spend time with you, then the money, the remuneration,
a very tangible economic benefit will be forthcoming, without a doubt. Money is a conse-
quence of attention, not the other way round.
On my end, during the past 3 years, I have switched my approach completely: I publish, I pull, I
try to maintain a reasonable level of quality, and I trust this will return economic benefits. And it has, indeed: 2009 looks
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more busy than ever before. I believe that when you ask "how does this come back with real $$ attached to it" too early, it
deflates your momentum just when you need it the most. Don't ask 'how can I make money with this' but ask 'how do I
add value with this, and will I get people to pay attention and trust me with this (and of course - do I enjoy doing this!)'.
Again, money is a consequence not the root (and there are other ways of remuneration, as well, not to forget) - just don't
miss the point when you can harvest it!
5) Look for new collaborations, unusual partnerships and disruptive alliances. In this highly volatile and fast-moving
environment, many of our roles are constantly shifting. Telecoms become content services, mobile phone makers go into
the music business, airlines start social networks, newspapers get into TV production, search engines start communities,
advertising agencies become R&D departments for major brands. In the near future, a lot more things will be a lot more
connected than we have ever thought possible. Your skills and what you have to offer may all of a sudden become a lot
less sough-after in your traditional line of work but suddenly become a must-have in a totally unrelated field. Musicians
become creators of brand-icons and corporate logos, video-making amateurs become content curators for digital TV serv-
ices, bloggers become brand evangelists, marketers become social network influencers. Review your assumptions as to
what you can do, look for disruptive ideas in whatever sector you are currently working in - and when the rising tide hits
you jump into the raft and float with it.
6) Go for creativity. Now. In this world of ever smarter machines, devices and software, the value of so-called facts,
computations and logic is greatly commoditized. If Google tells me the answer to just about every fact that I may want
to investigate, the ability to connect those facts, at random, and to create context, to blend them, to envision, to com-
pose... is where the new values lie. New jobs are emerging as we speak, and they will not be taught at schools and
universities any time soon. Pursue creativity, and the future is yours.
November 28, 2008 The Future of Mobile: Search more, talk less?
Ever since I got more friendly with my numerous mobile gadgets (the iPhone and iPod touch, the Nokia E71, the Asus ee
and various other gizmos) I have noticed a steady decline in how many actual calls I make; apart from friends & family my
professional communications have switched almost entirely to SMS, social networks, eMail, IM, Twitter, Skype etc - at
least for the initial level of communication. Now, is this just me, or is this happening everywhere? Once smart phones are
actually smart (and that means smart UI and UX), will we search and click a lot more than click + talk?
Some recent stats I have seen show that iPhone users already use Google 50 times as much as mobile internet users
with different devices. Once again: if something really works well... we actually use it routinely (just like GPS / car naviga-
tion I guess), if not we just ignore it.
So will someone that can use Google Maps on their mobile phone still call your office for directions? If you can use a
Starbucks 'coffee ordering' app will you still use the phone to pre-order a round of coffee for your office mates? If you can
tweet your friends that tonight's concert is canceled will you still need to call everyone to make sure they know? Will
someone that looks for the next Chinese take-out place still ask a stranger on the street rather than search on his mobile?
Will you buy 'Time-Out' magazine to find the best Sushi restaurant in London when you can search Twitter, or pull up Tri-
dadvisor or the NYT reviews on your mobile? Probably not. It looks like there are many calls we can do without, and if our
mobile device (via a browser or more likely via a specific application) can do the job quicker and more thoroughly I think
we'll be switching sooner rather than later.
The opposite is true for personal calls, of course - they will become more meaningful (and appreciated) than ever before;
but only if there is a real need for it. If I can see my friends' immediate location on my mobile (using something like Loopt)
would I still call them or would I just go there and meet them?
This trend is also why I think Social Search on the Mobile has a great future - rather than searching the entire world, I
search in the subsections and realms of my friends (real and otherwise), friendfeeders or tweet streams. I already use the
Search functionality in Twitter (see the pic - via the cool Tweetdeck application - check it out; they rock) and in Friendfeed
to do that.
This is also why I am excited about next-generation gizmos like 3's INQ1 Facebook 'phone' - clearly, this is showing us
where things are headed. Soon, we may be doing more searching - and finding - than calling.
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November 18, 2008 Hollywood "Big Content" Under Siege (my comments on Jonathan Handel's AlwaysOn col-
umn)
AlwaysOn's Jonathan Handel has published a nice column on what is happening with the content industries, and what the
future holds for Hollywood and the 'big content' companies. Here are some of the best snippets and, as usual, some
comments.
First, Jonathan defines the issue: "This battle turns on whether it’s true that “content is king,” as many people believe, or
whether content is becoming a mere commoner while the technologies that distribute it become ever more valuable"
I have written about this juicy topic several times, and even made a few videos on it: the question is somewhat academic -
I think that in the future, everyone gets to be king at different times. Sometimes it's Context (and filtering) that matters the
most, sometimes it's metacontent (i.e. tags, ratings, bookmarks etc), sometimes remixes, sometimes the packaging,
sometimes the platform. What's more, content does not need to be King any longer in order to make money - lots of new
revenue streams around content (rather than solely off or within content) are in the oven - we just need to tune them up a
bit more. And that's the tough part: we will need to let go off the old vine before the new vine has proven trustworthy; this
trend is faster than our revenue modeling.
Jonathan writes: "There’s no doubt that traditional content is in trouble. Theatrical box office and admissions ...have gen-
erally been flat for a number of years. The DVD business is declining... The network television business is harder than
ever, and also in trouble are other traditional content industries, such as those centered on music, newspapers ...books,
and magazines. People still consume media the old-fashioned way, but fewer and fewer do so every day, especially
younger people" A key phrase: fewer and fewer do so every day. Chew on that. The question is not IF but WHEN this sea
change will flood your beach.
This defines it very well: the hunger for content is bigger than ever but
the way that the digital natives consume it is totally different. And with a
change of 'how' comes the shift of payment; i.e. with time-shifting, place-
shifting and device shifting comes a much more troubling control &
money shifting. While working on my next book I have looked at this
trend in great detail, and it seems that if we compare traditional revenue models (such as 'selling copies') with the emerg-
ing new models (such as 'selling access' or advertising-as-we-know-it) we may be looking at a revenue reduction of 5:1,
i.e. what made a dollar then makes 20 cents now. The NYT is not going to make as much money with their online ads as
they made with their print ads, and they certainly won't sell RSS feeds for $1.50 per day. This is the challenge: new reve-
nue models (as Kevin Kelly calls it, the New Generatives) must be developed than can lead to entirely different sources of
remuneration and monetization, many of which we don't even know of, yet, and worse, which will become only apparent
after the dismantling of the current revenue model. I sometimes call this the YouTube curse: we know we need it, we know
we want it, we know it will work, we know it can make $$ but we (they) don't have the recipe yet!
Jonathan then talks about why traditional content is in trouble: "One [reason] is supply and demand. Demand for enter-
tainment is relatively static, because leisure time is constant, whereas supply (online content) has grown enormously.
Some of this is professional content, but even more is user-generated content (UGC). Other factors are the loss of physi-
cal form... the low-friction nature of the Internet ...and ad-supported new media business models....Market forces are also
key: Computers, Web services, and con-
sumer electronic devices are more valu-
able when more content is available and,
in turn, these products make content more
usable by providing new distribution
channels. That encourages the growth of
UGC and pirated content, reducing the
market share of paid professional content,
and, not incidentally, increasing the sales
of new technological devices and serv-
ices"
Brilliant explanation, and ending with a
fitting if somewhat worrying quote: "As
NBC Universal’s Jeff Zucker lamented,
the content industries are being forced to
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“trad[e] today’s analog dollars for digital pennies.”
I had to chuckle while reading the next few sentences: "In contrast to the stagnation and decline of the Los Angeles con-
tent industries, the technology business is marked by innovation....The pace of change in Silicon Valley is breakneck; in
Los Angeles not so much. Hollywood now finds itself yoked to an industry that evolves at a much faster rate, and the re-
sult has been a struggle over revenue, distribution channels, and control" - simply because it sounds so much like a
quote / snippet from my many keynote speeches and presentations on the topic of control.
This struggle over revenues and control is what we are seeing everywhere around us, right
now, and it's going to get even more brutal.
Jonathan's final paragraphs conclude: "Whether Hollywood will thrise, rather than just sur-
vive, is a harder question... While experiments with new media may yet bring profit to old
media companies, the question remains: Will Internet-based distribution (much of it ad- sup-
ported) and mobile ever generate as much gross and net revenue as traditional distribution?
If so, how much of that revenue will be captured by Hollywood, and how much by the tech-
nology companies that own the new distribution platforms? No one knows, but there’s been
little good news in these areas for Hollywood. If the studios continue to lose their grip on
distribution...they’ll be left with content as their core business. That’s a problem because, fundamentally, the economics of
content creation are inferior to those of distribution. The former is an industrial process, painstaking and manual. The lat-
ter, in the digital age, is post-industrial and automated. ...Like the British, whose monarchy is now a mere appendage to a
parliamentary government, content may find its kingdom ever more circumscribed by technology" Gotta love that one!
Here is my take on this: the telecoms' future plans need to converge or at least intersect with those of the studios so that
content and distribution can work hand-in-hand; albeit at the utter mercy of the people formerly known as consumers -
since it will be them (us) that will dictate what they like to both the telecoms and the content producers; and they will be
talking about it very loudly, on 3 Billion connected and socially-networked devices. I agree with Jonathan that this is the
challenge of course: now that CONTROL is on it's way out, and mere copies lose their meaning as chief instruments of
money-making, what will take its place, where will that other 80% of the 'disrupted value' come from... and who will get to
feast on these new pies?
November 13, 2008 From the Future of Music RSA event (London): Machover shows new possibilities, Kennedy
shows how to become the next China, I am the problem!
I attended the RSA / Royal Society of the Arts Future of Music event in London on November 11, and was treated to a
great presentation by composer, inventor, educator and MIT professor Tod Machover who showed us a whole new world
of how making music has changed, and how the joy of music can be shared by everyone, going forward. TedTalks has a
great video with Tod, here, btw.
Then, making the audience feel like they were dropped into a bucket full of ice cubes, the IFPI's (the International Federa-
tion of the Phonographic Industries, the sister organization of the RIAA) CEO John Kennedy followed right after Tod, and
was given a painful 40 minutes to present his views on where the music industry is going (i.e.... back to the past) and pre-
dictably asking for more sanctions and tougher laws to make sure the money keeps on rolling in for his member compa-
nies, no matter what those pesky users want.
While Tod's speech was inspirational and eye-opening (as
usual), Kennedy's speech was disturbing and deeply
troubling (also as usual) because of his steadfast refusal
to listen to face and consider the realities in today's music
economy and his scary way of pounding away on old
power-rhetoric that I thought had been buried for at least
10 years ("stealing a song on the Internet is exactly the
same as stealing a Mercedes").
Despite the fact that the European Commision has rejected (more details here)
the proposal spearheaded by the united (or shall I say universal) brotherhood of
Kennedy, France's Sarkozy and U2 manager Paul Mc Guinness which is propos-
ing to disconnect internet users that are suspected of sharing music online (the
Photo by Ralph Simon.
From the left: Paul Hitch-
man, Gerd leonhard, Tod
Macover, Sonia Diwan
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so-called 3 strikes and you're out proposal), Kennedy talked about this idea as if it was the holy grail of the troubled music
industry. Let's take a good look at what all of these people are doing online, inspect their every move and communica-
tions, and if we think there's illicit music-trading involved, let's just pull their plug. If that doesn't sound like Chinese-style
censorship and a bizarre Orwellian understanding of basic democratic principles, I don't know what does!
In good old Universal Studios, Universal Music and Lew Wasserman fashion, Kennedy was also not shy in making clear
that no resistance would be tolerated. When I (speaking from the audience) asked Kennedy if what he is proposing does
not amount to censorship and would basically take us onto the road of becoming the next China as far as intervention and
control and lack of free speech is concerned, he responded by saying "the problem is not China, Gerd, it's people like
You". Ah - I see, now we know. If 'people like me' would only shut up and let them get on with their plans, than it would all
be just fine. Where have we heard this before - you tell me.
Frankly, when listening to John I can't help thinking of George Bush and his huge success in destroying everything good
that America has ever stood for, or that the American spirit has accomplished. 8 years of Bush and the country is a huge
mess; everything that could possibly go wrong, did...! Similarly, after 10 years of IFPI vs the Internet, everything that
could go wrong, has, as well: consumers and music fans sued, jailed and fined; the record industry universally hated by
the digital natives; revenues falling off the cliff; innovation stifled by lack of cooperation and useful licensing schemes;
startups shutting down because of lack of industry support; a computer company (Apple) the #1 player in digital music, the
major labels bought up by private equity (see EMI) and / or deserted by their share-holders (see Bertelsmann and So-
nyBMG)... and on and on and on. Congrats, guys, well done!
I think we need the Obama of the music industry, NOW. And yes, we also need some people to be impeached because
they are doing a disservice to everyone. The industry's Iraq & Vietnam -like war against the Internet is pathetic, wasteful
and deeply wrong, and we don't need their Generals any longer.
November 10, 2008: Future trends in business communications: Phone stops ringing, eMail slows down, Social
Nets & Media explode
I don't know about you but I have been observing a significant shift in how people communicate, professionally as well as
socially and privately. While only 7-10 years ago, most of the work was done on the phone (I recall living in .com boom-
town numero uno, San Francisco, and using up all my 2000 AT&T minutes every single month!), eMail soon became big
with everyone, and now eMail is still pretty much the prime vehicle of business communications - thus the rise of black-
berry mania. Use of the phone de-
clined heavily as a result.
Now, it seems that... well, eMail is for
old people. About 18 months ago,
the use of 'social' business platforms
such as LinkedIn became more
prevalent, and all of a sudden people
started to have 'professional' conver-
sations on LinkedIn, Ryze (remem-
ber??), Xing, and then, soon, Face-
book, Myspace, and now... Twitter,
Skype and GTalk. Now, for me, it has
already become the No. 1 method of
how people reach out to me: rather
than calling (ouch) or even emailing
(ehem), people ping me via my vari-
ous networks - and I think this will
increase drastically because it pro-
vides a build-in filter as you have to
be in my network to ping me via the
Network.
This, below, is how I see this develop-
ing - and this will have vast conse-
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quences for business communications, going forward. Needless to say... I do have some ideas, here. Talk back!
November 10, 2008 The LongTail questioned - The Register says it's all bunk. I say they are wrong.
Update: Chris Anderson commented here (thanks to ricetopher) Andrew Orlowski at the Register (UK) just published an
interesting opinion piece that basically says that Chris Anderson's LongTail concept is a bunch of Silicon-Valley utopia,
and self-perpetuating hype. His main argument is that 'evidence' collected by MCPS's Will Page et al suggests that digital
music sales don't display a longtail characteristic, at all - rather, they exhibit the very same top-heavy, hit-centric income
patterns that we've had in content sales since... well, the advent of electricity and the phonograph, I guess: the few hits
make most of the money. Here are some quotes from Andrew and El Reg, followed by
my comments:
"They discovered that instead of following a Pareto or "power law" curve, as Anderson
suggested, digital song sales follow a classic Log Normal distribution. 80 per cent of the
digital inventory sold no copies at all - and the 'head' was far more concentrated than the
economists expected. "Is the 'future of business' really selling more of less?" asks Page.
"Absolutely not. If you had Top of the Pops now, you'd feature the Top 14, not Top 40. An-
derson bet that the orange portion - the "Tail" - has more value than the red portion - the
"Head". But it doesn't.
"The Long Tail's argument is that the pattern of
consumption for media is bent out of shape by the limits of the shops selling
them. Digital media lets the nature of people's demand flow free. Well, we now
know what the shape of that demand curve looks like. Bud told the conference
that the basic shape of consumer demand for digital music clearly fits the Log
Normal distribution, "with eye-watering accuracy". That's no surprise, he says,
because so many sales curves he's seen over the past ten years follow this
distribution. "Now we've seen what happens when tens of millions of choices
are thrown in the air and people can go pick them up. What was astounding
was the degree of inequality between the head and the tail - by a factor of
three. It's specifically the Log Normal shape that leads to a rather poverty
stricken Tail. "There are Tails where the Tail lives as a kind of welfare state. Not
this one. You starve in this Tail.... In another surprise, 80 per cent of the revenue came from 52,000 songs. What's eye-
catching about the number? Well, the typical inventory of a conventional high street record store was around 4,000 CDs.
Or ... around 52,000 songs"
To me, Orlowski's LongTail-shredding efforts are fairly typical of a recently rather prevalent, short-sighted pessimist's view
of the world based on the process of crunching statistics and numbers - which admittedly feels much safer - but are totally
skewed to begin with (quote "But he [Chris Anderson] didn't examine the numbers closely or critically enough, say the
economists"). Isn't a journalist supposed to give us a viewpoint of what is coming, rather than what has been, and isn't he
supposed to look beyond the numbers?
Why in the world would I use numbers taken from how digital music has actually been sold during the past few years,
when every single aspect of digital music commerce has been flawed and - at best - represents 2-3% of the digital music
potential, in total? Why would I want to make assumptions about a new, future model of music commerce based on the
obviously abject failure of an old model? 6 Billion (or so) sold songs on iTunes and the various WMA-based services in the
past 4 years will show me the patterns of FUTURE CONSUMPTION? Don't believe it.
Here is why the numbers and the research that (the otherwise smart and clued-in) Will Page et al, and now Andrew Or-
lowski, have based their 'longtail is bunk' assertions on, are ill-suited for any such conclusion:
1.
Until just recently, there was no real easy way to obtain i.e. buy digital music online - unless you bought into the
Apple or MSFT digital content schemes, or went all-indie with EMusic; and that is why very few consumers actu-
ally did it. All digital music was copy-protected with that wonderful snake-oil called DRM (which industry bodies
such as Page's MCPS supported very strongly), and you had to buy per-track which made any real engagement
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Page 13
a very expensive proposition. So - no surprise - what do you think those very very very few people that would ac-
tually go though the trouble of legally obtaining music in this way (i.e. mostly via iTunes) would buy: yes, you
guessed it, the Hit Songs, the stuff they know from the artists they know, because it is expensive and one cannot
afford to experiment - and try longtail stuff you may not be sure about, yet. To assert that this is a realistic reflec-
tion of what people would select if in fact there was an open-format, very likely flat-rated and economically easy
way of point-click-buying music is like saying that people really love Shell gas if there are only Shell gas stations
within a 1000 mile radius! In other words, the economic model for digital music that the music industry has for the
past decade tried to force on the consumers has obviously resulted in a total (and I would say, very welcome) re-
flection of their offline revenue model: only the hits make any real money.
2.
Therefore, the question is not at all what the 'learnings' from those DigitalMusic1.0 statistics would be -because
we already knew that the basis for these numbers was an artificial, limited and controlled environment before we
read Orlowski's piece or Page's presentation- but what they WILL BE once we actually have a real Music 2.0
economy, where the users can click on, play and select any song they like, try out anything, anywhere, anytime,
share, forward and link, without having to pay extra, without having to ask for permission, without having to buy
into the MSFT or Apple club - and those possibilities have only recently emerged (at least in a legal way).
Orlowski then tops it all off by saying: "The propensity of journalists - even highly experienced journalists - to fantasize
about the world rather than examine it critically is one of the defining features of modern technology coverage..." Andrew,
never mind that you don't like Futurists, but please: where would we be if we could not fantasize about the world and its
future, and look forward, beyond the oh-so-sacred numbers we have now, the so-called facts called from our painstaking
research...? If you were to make decisions solely based on the obvious facts drawn from past actions you would be in
deep trouble, indeed.
I am with Paolo Coelho when he stipulates the exact opposite: "Whenever we need to make an important decision, it is
best to trust impulse and passion, because reason usually tries to remove us from our dream, saying that the time is not
yet right. Reason is afraid of defeat, but intuition enjoys life and its challenges" (Acceptance speech delivered to the Bra-
zilian Academy of Letters)
Posted by Gerd Leonhard on Nov 5, 2008: 5 steps to finding another way forward - getting on the right track to
the Future of the Music Business
I really enjoyed Ted Cohen's MidemNetblog post from last week as it quite succinctly pointed out the urgency to act now,
and to implement real changes in the way the music industry works. I feel strongly that there may very well not be too
many gatherings like MIDEM in the very near future if we don't embrace CHANGE much quicker than we have been.
I wrote on the SAG's strike and a project called Strike.TV on my Mediafuturist blog yesterday, highlighting the fact that the
rule seems to be that we don't change unless the PAIN gets big enough. Well, it seems to me that we are there, right now,
so here are 5 things that I believe would help us get there:
1. Truly collaborate to arrive at sweeping and effective solutions: the music industry has been notorious for in-fighting,
wide-spread distrust, clubbiness and ludicrously fragmented business procedures and licensing rules. We need an
industry-wide innovation initiative that looks at new business models from a global joint perspective of labels and publish-
ers, artists and managers, agents and promoters, startups and societies. We need to rethink our traditional business rules
and put the cards on the table - or that very table will start to burn down while we're sitting at it.
2. Watch and listen to the kids i.e. the digital natives, and then offer business models that will serve them in the way they
want to be served, not as we would prefer them to be served. This is seriously ingrained problem in the music industry: all
too often, we are assuming the 'consumer' aka user to be different than they really are, and / or we are thinking of them to
act like we do. This is a deadly mistake, as it will be those very same 15 year old kids that do Facebook, Twitter, Loopt,
Spotify, Songza or Youtube that are our future customers. This ignorance has cost us billions already so let's stop acting
like we can control them or tell them what to do.
3. Question our fears and assumptions - because they guide us inadvertently to faulty conclusions. I can't tell you how
often I run across this problem when I do my speaking gigs: those deep-seated and mostly unspoken fears of 'not getting
paid', of being ripped off, of losing an advantage, of losing control, are often at the heart of many decisions that are made
in the music industry. If we don't start facing and containing those fears, and the assumptions that stem from them (e.g.
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Page 14
'nobody wants to pay for anything on the Internet', or 'those kids can't be trusted), we will always decide on the wrong
course of action. It is time to take an honest look at where we really are, and how things work in today's world.
4. Question our desire to keep control at all times. This goes with point the 3rd one, of course: when watching the music
industry actions, it all too often seems like it's more important to our 'leaders' (?) to remain and assert control than it is to
make money. This is a deadly attitude that needs to change asap so - on the risk of sounding like a broken record here -
let me spell it out for you: we will not, and we cannot control what
people do with our music, going forward. How much they share,
when and how, how they re-use it, how and when and where they
listen to it, and which music they like. We can only participate, get
their attention, get them to become fans, and then turn their at-
tention into dozens of possible revenue streams. It's now solely
about TRUST and Merit, not about selling copies. Give up control
and get ready for much larger things to come back to you!
5. Open up and have real conversations with everyone,
whether it's users and fans, or the government, the media, other
industries, ISPs, startups etc. How many music industry 'leaders'
are blogging? How many have a twitter feed? How many would
reply to your email? How many are on Friendfeed? How many
are on Facebook, joining the conversation? How many really
want to HEAR from the public and show that they are open to
conversation? Again, let me spell this out for you: Markets are
Conversations. If the music industry does not want to have real conversations with it will shrink inevitably.
Posted by Gerd Leonhard on Nov 3, 2008: Strike.TV: a good example for changing only if and when the pain gets
big enough?
Peter Hyoguchi, the CEO of Strike.TV has posted an interesting write-up on AlwaysOn, here. The idea behind Strike.TV is
to give the troubled screenwriters and their colleagues a place i.e. website where they can produce and show i.e. stream
their own original shows. To quote Peter: "In total, Strike.TV has forty new web series created by
the writers of The Office, The Daily Show, Die Hard, Child’s Play, Robot Chicken, Malcolm in the
Middle, The Black Stallion, Star Trek, Top Gun, ...many, many more. To date, this is the largest
collection of original Hollywood produced content ever created for an Internet audience". I
checked this out a bit, and some compete.com stats on Strike.tv are here - obviously this is still
very early - but I shall be watching!
In any case, Peter's story made me think on another level: do we only really get going when the big is big enough? When
the screenwriters went on strike did the pain-level finally increase sufficiently to actually allow or shall we say force people
to make some of those changes we have been talking about since the rise of the Net and the Netscape IPO, to do things
differently, and on their own. Would Strike.TV have happened if it hadn't been for the strike that fueled it, and all the pain
that went with it?
What does this tell us about Change - looks like disruption, and to some degree destruction, needs to happen before we
are ready to make real changes. The pain pushes until the vision pulls - as Michael Beckwith says? If so I guess some of
us could argue that right now a lot of change is gearing up, since there is a lot of pain around, given the current economic
circumstances. Will this force us to reinvent, to actually let go of the old vine and seize new ones? Let's hope so.
Here are some more quotes from AO and Peter Hyoguchi: "... 2007 was a perfect storm.
New electronic inventions were unleashed setting off the largest tectonic shift Hollywood
has ever known. Looking back at the history of motion pictures, there's nothing really to
compare it to..Making movies has always been reserved for the very rich... At a hundred
dollars a minute for 35 millimeter film, only the super elite can afford to make movies.
Until now. Last year HD video cameras came out that equal the image quality of 35mm
film cameras, instantly changing the cost of shooting movies from hundreds of thousand
of dollars to just a few thousand. In 2007, inexpensive software was released which al-
lows you to edit professional, high definition video on a laptop. Also last year, streaming
HD video over the internet became virtually free. Without the need for millions of dollars
to make and distribute professional quality movies, creators have instantly been given
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Page 15
incredible freedom over their medium. We are witnessing the dawn of a Hollywood Renaissance..."
A brief comment on this last piece: probably more like the dawn of a movie-making renaissance since all these changes
will probably mean that's is no longer about the location 'Hollywood' but the occupation 'Hollywood'?
No matter what business we are in, I think we can learn something from what Peter says, further: "Strike.TV represents
the opportunity for creators in Hollywood...to tell their stories totally unchanged and unaltered. Their vision exactly realized
for the audience. A first in Hollywood history. And because they don't have to make back X amount to pay the huge costs
the networks and studios need to cover their vast overhead, these shows can be as odd-ball, strange and as niche as
they want to be. They don't have to make millions of dollars. They don't have to appeal to Everyone. A smaller audience
who really digs it is enough to support the show." Another argument for the rise of niche-markets in the future, indeed -
the Longtail, take 2 (pain-enforced)? But how long will this take?
"And the coolest thing of all, Strike.TV's shows are totally free. No cable bill. No movie ticket. No video rental charge.
Strike.TV works in a new economic model that is still being tested. Ad-supported entertainment". This is a very, very im-
portant point: free or feels like free to the user / viewer / listener, but still creating revenues for the creator. The scary part
is that we are soooooo early in the process of generating those new revenues - this cook-book isn't written yet, and there
are even very few recipes.
But Peter goes on to explain: "The reality is there's nothing new about it. Shows in the Golden Age of TV like Kraft Televi-
sion Theater, Ford Theater, Goodyear Television Playhouse and others were funded directly from Madison Avenue. His-
tory repeats itself. Right now, the Internet is where television was be-
fore it’s first hit. Cynics were saying TV is a fad. A gimmick. There's no
money to be made in TV. Then Howdy Doody became the first smash
hit and a whole economy was created around TV. We now are stand-
ing on ground zero of the Golden Age of the Internet. We are pre-
Howdy Doody. And of course there will be a hit Internet show. And that
show will be a Global phenomenon. A new economy will be created
around original web shows. There will be modest niche hits and out-
of-the-ballpark mega-hit shows..."
Not much too add here - this is right on-the-money. Now let's get to
work - and not just for TV content.
Posted by Gerd Leonhard on Nov 1, 2008 A book you must read: "Crowdsourcing" by Jeff Howe
If you are in the 'content' and / or media business, Jeff Howe's new book 'Crowdsourcing' is a must read, because it de-
scribes a powerful trend that will change the way we do business: because of the fact that we are all connected now, at all
times (well... just about), it is no longer just authorized insiders, professionals, employees or otherwise paid workers in
large firms that can solve large problems or contribute to complex projects. Now, the world
can be your talent (as Don Tapscott is putting it, in Wikinomics, years ago), and companies
like Procter & Gamble are busy sourcing ideas and solutions from anyone that wants to
take a crack at it, via platforms such as InnoCentive or YourEncore.
Here is Jeff Howe's definition of Crowdsourcing: "The White Paper Version: Crowd-
sourcing is the act of taking a job traditionally performed by a designated agent (usually an
employee) and outsourcing it to an undefined, generally large group of people in the form
of an open call. The Soundbyte Version: The application of Open Source principles to
fields outside of software." Jeff's blog is here, btw (a Wired blog). Some nuggets from the
book (quoted):
Labor can often be organized more efficiently in the context of community than it
can be in the context of a corporation
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Crowdsourcing has the capacity to form a sort of perfect meritocracy... Gone are pedigree, race, gender, age and
qualification
When this demographic (the digital natives) reaches adulthood, they will bring behaviors and attitudes honed
through 1000s of hours in front of a computer, constructing their own experience and working collaboratively in
various online communities
Some related books: The Cathedral and the Bazaar (Raymond), The Wealth of Networks (Benkler), Wikinomics (Tap-
scott). Read away…
Posted by Gerd Leonhard on Oct 24, 2008: The New York Times earnings report parallels recorded music trends:
digital revenues not nearly enough to offset steep decline in traditional business
Via Inquisitr: The New York Times (see my story on their Times Select efforts, here) just just
published their 3rd quarterly report, and things are not looking good: "The company reported
3rd quarter net income of $6.5 million, compared to $13.4 million for the same period last year.
Advertising declined 16% in the quarter after reporting an 11% fall for the first half of the year.
Print advertising took the biggest hit with an 18.3% fall for the quarter, with classified advertis-
ing down 28%. Online advertising was up 10.2% off an increase of 16% at about.com, but the
online gains were not enough to offset the decline in print, with online advertising making up
12.4% of advertising revenue for the company, but up from 10.6% for the same time last year"
Traditional revenues are seriously down; digital revenues are up but clearly not enough to get even close to anything re-
sembling growth. No surprise here: the very same thing has happened in the recorded music sector: CD sales are nose-
diving (or shall we say grave-diving?) but download sales are not anywhere close to making up for that loss.
So here, unsolicited, is my take on why this is happening, and what I think could be done to change this. Why is this hap-
pening? The bottom line: much too little & way too late. Even though the NYT has recently really stepped up their efforts
(see below), it took both the newspaper / print publishing and the recorded music industries years (or shall I say, a dec-
ade, in the case of the major record labels) to even start thinking about how they could embrace & then monetize the irre-
versible changes brought on by the digitally networked kids and young adults that will be the readers / listeners / viewers -
the people formerly known as consumers - of tomorrow.
Years ago, the NYT put their admittedly great content (and their archives) behind the Times Select subscription wall, and
very few people (257.000 I think - a really disappointing number considering the global leadership status of the NYT).
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Page 17
Meanwhile, the major record labels - severely disconnected from reality in their corporate suites and limousines, and not
to be outdone by a bunch of kids armed with p2p software - secured their precious digital music with a bunch of messy
and utterly disruptive software locks (the very epitome of snake-oil fka DRM), and then cleverly hid it behind the pay-per-
track wall of iTunes, Napster and Rhapsody, as well. The result: very few people buying. iTunes? Nope, while it's a nice-
to-have for the labels, and an even greater trojan horse for iPods, the approx. 6 Billion songs purchased via iTunes (which
owns75% of the market) in the past 3 years is not a major achievement for the record labels - it's a nicely dressed-up
failure since it ignores about 95% of the market, i.e. the average user who will simply not buy music on a per-unit basis, at
this price-point. This indeed seems to be the music industry's specialty: pyrrhic victories.
In other words, the failure of the NYT (until about 18 months ago) and the Record Industry (well... mostly the major labels)
to really jump in all-the-way and give the users what they actually want (what a concept!), has led them to this point where
- as large incumbents - they are much worse off even most cash-crunched startups, for they have infinitely higher costs
(staff, overhead, salaries, executive compensation plans etc etc) and a closet full of smelly skeletons that severely restrict
them from pursuing the much needed innovation they need at this time. This list includes items such as content provider &
artist contracts that are 10+ years old and don't provide for any wiggling room on digital distribution, legacy businesses
such as special products and record clubs that they want to maintain but that are not sustainable in a digital environment,
CEOs and executives that are still utterly clueless about where things are really going. While the NYT may actually be an
exception as far as utter cluelessness is concerned, the music industry still wins the grand-prize with UMG's Doug Morris
who does not miss any opportunity to show the world how little he gets and how much he intends to remain in control no
matter what the price - he'll
take Control over Money,
any day!
One thing is for sure: if I
were to put money into the
future of newspapers and
publishing, I would rather
put it into SixApart or Twit-
ter than the NYT (or ask
them to buy both, first!) and
if I were to - foolishly - put
money into music I would
rather put it into Terry
McBride's Nettwerk Music
Group, Denmark's Spotify, or Holland's Sellaband. Anything that disrupts and creates a new logic will probably be better
than most traditional players who will almost always try to reinsert friction into an already liquid digital ecosystem, forever
chasing bygone illusions.
Now, having said all that I must admit that I love most of the good stuff that the NYT has done during the last 18 months -
and they are certainly miles ahead of the record industry (not that this is a tough mission, really;). Blogrunner (they now
call it 'the annotated Times' - nice!) is a great idea, taking down Times Select is a great idea, bringing in top level bloggers
is a good move, adding more videos is a good move, and adding value with things like the Times Machine is cool, too.
The bottom line is that unlike the major record labels - which have utterly destroyed any trust across the board, both from
the music fans as well as from the artists, and therefore are pretty much doomed - I think the NYT has a good chance of
coming out the other end, but it needs to act now. So, here are a few "turbo-charge the NYT" ideas that come to mind:
Buy Twitter or at least get very cozy with them. Micro-blogging is here to stay - it's the next ubiquitous global
communication tool after SMS.
Offer the entire NYT's daily edition via all kinds of mobile apps (iPhone, widsets, Android etc) and widgets. Take a
page from the new mobile gmail app - and start selling targeted and personalized advertising right within these
apps.
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Get a lot deeper into video - this is a multimedia, watch-this world now. This should include downloadable feeds
and video-casts, rich-mediaRSS and streaming apps for mobile devices - you've got the brains so why not offer
something for the eyes, too?
Build or white-label a social network for NYT readers, writers, contributors, and base
it around the great content you have.
Get a lot more into conversations and ditch the monologs. The READERS are the
new content, too. And... the new testing ground for next-generation advertising.
Get into next-generation advertising, and become a leader in this turf: how about
widgets, mobile ads, branded content, video advertising...?
Widgetize and decentralize everything. People should be able to read (and watch)
NYT content everywhere, no matter where they are.
Bring a lot more good bloggers aboard: they have the goods, they are very cost efficient, and they need your
audience, now more than ever!
Get seriously into eBooks and eReading. Watch what people are already doing with all the cool reading apps for
the iPhone (such as Instapaper), and where Amazon's Kindle is going: the electronic book business is about to
take off - in another 12-18 months this will be a huge opportunity (imagine: rather than spending all that cash on
printing and shipping of newspapers and books you could spend it on the actual content production)
Posted by Gerd Leonhard on Oct 21, 2008: Take note: Free for the users is NOT the same as 'Unpaid' for the crea-
tors!
One of the most common reactions during or after my many Music 2.0 / Future of Media & Content presentations or key-
notes is renewed fear of not getting paid for what you have painstakingly created, be it music, books, films or TV shows.
These 'fear & worry' moments usually come from the often deeply-seated misunderstanding (or should I say assumption)
that 'Free' for the end-user means 'No Payment' for the creator. This is, of course, not correct - and increasingly so: the
Internet has not just disrupted the cherished traditional value model of selling copies, but at the same time the Web has
also brought us powerful new ways of selling content as access and service, at a much lower cost and with global reach.
Just like Radio is free for the listener (in most cases - at least we don't have to insert our credit cards in order to be able to
listen to radio), it also does generate substantial amounts of income for creators (in most countries;) - and if we could fi-
nally agree on a suitable deal for online and interactive radio, it would drastically increase in the next few years, as well.
Most performance rights societies (PROs) around the world are confirming this trend: public performance income is UP,
and copy-related income (i.e. mechanical reproduction) is down. In the near future, it is not too far-fetched to imagine a
revenue share for interactive radio streams
that are tied directly into search results on the
most popular search engines!
Now, let's take it a step further: since the Inter-
net is essentially the next Radio and TV - and
places like Facebook are likely the next broad-
casters - why not license the Internet (yes,
streams AND downloads) just like we licensed
radio? This will take us to the discussion on the flat rate, of course, see more here - I have a hunch that we will embrace
this topic at MidemNet, as well ;)
But, back to FREE: Radio & TV licensing in Europe makes for a great example - most of us pay Radio & TV license fees if
we own a device that can receive terrestrial (and now, digital) broadcasts. Many of us don't exactly like paying this fee (I
think it's something like 150 GBP in the UK, per year and per user, for example), but we have simply gotten used to this
unavoidable and accustomed payment and it's just something we tacitly adhere to; at least until just recently when the
debates over the archive access for public broadcasters got started. Therefore, the BBC, ARTE (one of my favorites), ZDF
etc already feel like free to us, and so does the new BBC iPlayer that allows UK citizens access to broadcast archives for
7 days after the initial showing. Maybe one of these days access to legal content via the Internet - at least on some basic
level - could also be wrapped into the existing TV & Radio fees, or better yet: targeted, opt-in, permission-based advertis-
ing and brand marketing could provide the cash injections on our behalf!
Another great example for 'FREE to the user' that will generate real cash is Google's new offer in China: anyone that uses
Top100.cn (Google's Chinese search engine) can stream and download feels-like-free music that is provided by 1000s of
Chinese artists in return for a revenue share of the advertising on the search pages. See more details here. The result:
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Page 19
Free Music, Money for the Creators (and keep in mind that their music iSerious_change_copyn_economys otherwise
freely dished out across the Net already- see Baidu), Happy Users.
And consider Last.fm where their new owner - CBS - is paying for their users to enjoy 'free' music-on-demand, Myspace
Music (same deal, except that the large ownership stake of the major record labels will make this a much tougher proposi-
tion for everyone that is not yet in their privileged club of shareholders), or Nokia's Comes-with-Music, where Nokia is pay-
ing for the music as a new (and I think very interesting) way of marketing their mobile devices fka mobile phones - i.e.
instead of running expensive ads they simply pay for the music to give to
their users 'for free' (some people would call that branding I guess).
We will see this model explode in the next 12 months, and that's great news
for rights-holders and creators that are willing to give permission rather than
intend to build ever-larger dams around the raging sea of user-
empowerment that is the Internet: Music will Feel Like Free (FLF), 3rd par-
ties will pay plenty, and the pie will grow for everyone - if we are reasonable
about licensing fees and terms. Because, as Kevin Kelly has been pointing
out for the last 10 years or so: if you can't sell copies anymore, sell some-
thing that can't be copied.
My expansion on his theme: If and when copies feel like free (but usage still
generates cash, too) let's up-sell to the EXPERIENCES of music based on
having the users' attention already.
In this context, Kevin Kelly's wisdoms on the 8 New Generatives is a must read for anyone looking to understand how this
works. Let's embrace Feels Like Free as only the first step to many new income streams - there is more money in creating
good content than ever before!
Posted by Gerd Leonhard on Oct 18, 2008: Twitter has officially arrived at the Center of Pop Culture, Britney
Spears now twittering and sharing content on new 'bloggy' site, and Ning Community, too!
Techcrunch reports on Britney's new site (which feels very 'bloggyy' and seems to focus
on getting the users involved rather than just displaying static information) and her new
Twitter account, aptly titled TheRealBritney. Surely this is a sign that Twitter has now
officially 'arrived' - and any artist and / or content creator will ignore micro-blogging at
their own perril. Guess what: now you have to provide more and more free content to
pull people in before you can ask for their money. But there is plenty of so-called 'mone-
tization' at the other end!
To me, Twitter is another important manifestation of the rapid rise of the broadband +
mobile - driven Sharing & Participation Culture (* see more of my writings on that subject,
here) that is quickly taking over from the broadcast-to-you-the-passive-consumer culture that was largely dominated by
traditional television.
I am not a Britney fan (as you may have guessed) but I do like the way her team is clearly emphasizing interactivity, user
engagement and free content throughout most of what I see here (e.g. the Friend Britney Button) - good stuff!
Her Circusvip page (linked via the same button) is even more interactive - nice one. This page is ap-
parantly build on the Ning platform which I have been busy telling many artists, managers and bands
about - the perfect white label offering for building your own social network, quickly. In fact, I kind of
like the Ning / CircusVIP site better than Britney's main site - and the 15335 people that have already
signed up there seem to agree I guess. Engage, participate, share, have conversations - that clearly is
the Future of Marketing. Yes, soon... blogs will become record labels. And major labels will be-
come....? (you tell me)
We now
live in a
Sharing
and For-
warding
Culture
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Posted by Gerd Leonhard on Oct 16, 2008: The Cloud and the Crowd: Our Future
I have been busy reading 2 great books (yes... those long flights without Internet connections are perfect for that) that
have become a strong influence on my recent work: Crowd-
Sourcing by Jeff Howe, and The Wealth of Networks by Yochai
Benkler. I realized mid-way through my reading that both cloud
computing (i.e. the fact that everything we need that can be digit-
ized - such as software, media, searches, bookmarks, databases
etc - will be stored in the network rather than on devices and ma-
chines that we carry around) and crowd-sourcing (i.e. the drastically
decentralized way of sourcing content, ideas, co-workers, collabo-
rators and actual production via that very same network) will pretty
much be impacting everything else we do, in the very near future.
See below. And smile.
Posted by Gerd Leonhard on Oct 15, 2008: eMail is for old people (and that includes me I guess) - the end of
eMail as a social tool?
I am 47 and I just realized something (probably belatedly so) that I think is important to share with you: the Digital Natives
[Wikipedia explains] the Net Generation, the 10-27 year-olds, don't use email like we do. For them, emailing means busi-
ness, parents, government and other unfortunately unavoidable stuff. If they want to communicate (and that means 2-way
now), they will twitter each other, leave messages on Facebook or Myspace, Orkut, Cyworld, StudiVZ, Mixi, or subscribe
to each other's blog feeds or follow each other on Friendfeed (well.. yes, mostly the geeky ones), or chat on IM, via QQ or
talk / video-talk on Skype, or SMS each other (worth $100 Billion in 2007). Even more importantly, they share stuff in order
to im- and explicitly communicate to each other by aligning with personalized content that shows who they are, such as
posting and commenting on youtube, sharing pictures on Flickr, bookmarking stuff they find on delicious, sharing slide-
shows and presentations on Slideshare, music recommendations on Last.fm and iLike... and so on.
eMail is way too formal, too direct, too organized, too PUSH for them, and is usually used
more in the same way that we 'older' people used the fax or even good old snail mail. And
the age range that deserts email as a social tool is increasing every week - this is one of
the reasons why I recently junked my monthly email newsletter: it had become pretty
much like flogging a dead horse, there was no conversation, no 2-way process.
This trend makes a huge difference for marketing and selling stuff online (or... rather, pe-
riod): you don't get to push to these people anymore, you must PULL. You must get them
to befriend you on the social networks, sign up for your RSS feed, follow you on Twitter -
in other words, you must offer value and
merit, and build trust. You don't own them,
somewhere deep inside your databases - they own YOU in their minds, or
Not. Ouch. Good. Yes? Talk back --- comment below!
Update: Alex at ReadWriteWeb has previously written about this - just dis-
covered his column here
The
Crowd +
the Cloud
is the
Future of
Media
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Posted by Gerd Leonhard on Oct 12, 2008: Nice review of my Futurist Presentation & Speech in Trinidad
Judette Coward Pugliesi has a nice review of my recent gig in Port of Spain Trinidad, here. There is some good stuff in
here that is worth quoting:
"Leo(n)hard stopped short of saying that traditional media was dead preferring to hint traditional thinking was state of
mind whose biggest limitation was a lack of creativity..." Very astute conclusion indeed. "What we are witnessing today
is a drastic departure from the old days of top-down TV culture to one that allows for consumer participation and self ex-
pression. “We are no longer content with being consumers of media, we actually want to be part of it, influence it, change
it and yes even create it... explained the futurist"
This summary is the best part of the review - nice to my fanciful slides condensed into a few lines: "Here is the conundrum
for marketers; how to get the attention of the now all powerful consumers in a noisy and fragmented market place?
Leo(n)hard gave the following tips that were brilliant because of their simplicity. I took note of them because they can be
easily implemented as part of any strategy. He advised marketers to:
Make open communications a must
Shift marketing online to video, social networks and mobile media
Maximise Google juice; it is crucial to digital branding
Ensure the customer experience online is seamless and engaging
Capture metrics and data
Make content free or customers will click your company into oblivion.
Posted by Gerd Leonhard on Oct 14, 2008: From my 'End of Control' Blog: Apple Reluctantly Tries Out Transpar-
ency - Welcome to the End of Control, Steve!?
A crucial post on Wired.com popped up in my reader this morning: After a Decade of Secrecy, Apple Reluctantly Tries Out
Transparency | Gadget Lab from Wired.com. These paradigm changes at Apple are indeed a big deal since in my view
Apple is pretty much the only market leader and 'cult brand' that still banks solidly on a Total Control paradigm - and the
bizarre thing is that I like their stuff, a lot, regardless. So...Wired's Brian Chen writes:
"The tight-lipped corporate giant recently made a move toward transparency when it lifted its iPhone non-disclosure
agreement. The unpopular policy prohibited iPhone application developers from discussing their coding techniques. Lifting
the NDA may hurt Apple by exposing the inner workings of the iPhone to competitors like Google and Nokia. But increas-
ingly open competitors and disgruntled developers may have
forced Apple's hand..."
This last sentence is important - this is happening every-
where: openness trumps closedness, trust trumps control,
and increasingly so. Give it another 18 months, riding on the
crest of the wireless mobile broadband explosion fueled by
powerful mobile devices, and everyone will be busy showing
us - the people formerly known as consumers - how open
they are, and how much they will empower us and deserve
our trust.
Look at this key sentence in Apple's explanation why -until
now- they required NDAs for the iphone app store
developers: "We put the NDA in place because the iPhone
OS includes many Apple inventions and innovations that we
would like to protect, so that others don’t steal our work"
The fear of being ripped off caused them to want to control
the people that worked with and for them - their biggest fans
and most important users! Sound familiar? In the future, this is a risk that you'll just have to take - you cannot publish
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Page 22
something and then build a remote control safe 'catch' into it. My prediction:
watch for Apple dropping the DRM from iTunes in the near future, as well -be-
cause now, really, Friction is Fiction.
More from Wired: "So what gives with the openness? One of the things that's
happening to Apple is that it's less able to keep secrets than it used to be, be-
cause it has a broader supply chain and broader distribution," said Roger Kay,
an Endpoint Technologies analyst. "And because it's dealing with parties that
need plans -- partners as well as some customers -- they need to disclose their plans. Kay explained that Apple isn't alone
anymore; the company is now working more closely with partners, such as iPhone developers, mobile carriers and so on.
That inevitably forces the company to open up..."
In other words, you can't go it alone anymore, you can't keep the lid on people that
are adding value to your enterprise, and you can't dominate a de-central ecosystem -
anymore.
Welcome to the End of Control, Apple?!;)
Posted by Gerd Leonhard on Oct 3, 2008: Paolo Coelho crowdsources directors
for "The Witch of Portobello" - Hollywood 2.0?
I ran across yet another Paolo Coelho marvel today; a very interesting approach to movie-making that I found via fellow
Swiss blogger Bruno Giussani's LunchOverIP blog, here.
Bruno says: "Another is called "The Experimental Witch" and is a film competition/movie crowdsourcing project based on
Paulo's novel "The witch of Portobello" [PC:]" I’ve been visiting the pages of readers this last year and I’ve seen excellent
works by actresses & actors, musicians, directors, etc. That’s why I thought: why not make a movie together?", he asks.
How would that work? The book is divided into 15 narrators' perspectives. Paulo is inviting filmmakers to sign up, pick a
narrator, and shoot a video including all the scenes in the book in which that narrator interacts with the main character,
Athena..... After the scenes are shot, and the videos uploaded to a private YouTube account, the best ones will be chosen
to be edited into the final movie -- all the rights will go to Coelho, while the filmmakers will get 3000 euros each, plus a
share of fame if the experiment works out..." This was in May 2008, so I looked around a bit and Paolo has posted an
update, here. The whole thing is sponsored by HP. Related: my previous post on Coelho, a few days ago
Posted by Gerd Leonhard on Sept 29, 2008 Esther Dyson on new ways of looking at compensation for content
owners and creators (wow!)
I just ran across this truly brilliant essay on Wired.com - it's from 1995 but it reads like a perfect answer to today's issues
facing content creators and providers. Esther Dyson is truly amazing - and this was 13 years ago! So, here are some of
the best nuggets - if you are in the content business, the is a must-read.
Quoting Esther (links and
underlines etc are mine,
and go to some blog posts
that I think are related):
T h e
problem for providers of
intellectual property in the
future is this: although un-
der law they will be able to
control the pricing of their
own products, they will op-
erate in an increasingly
competitive marketplace
where much of the intellec-
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Page 23
tual property is distributed free and suppliers explode in number
On the Net, there is an equivalent change in "gravity" brought about by the ease of information transfer. We are
entering a new economic environment - as different as the moon is from the earth - where a new set of physical
rules will govern what intellectual property means, how opportunities are created from it, who prospers, and who
loses.
Chief among the new rules is that "content is free." While not all content will be free, the new economic dynamic
will operate as if it were. In the world of the Net, content (including software) will serve as advertising for services
such as support, aggregation, filtering, assembly and integration of content modules, or training of customers in
their use. Intellectual property that can be copied easily likely will be copied. It will be copied so easily and effi-
ciently that much of it will be distributed free in order to attract attention or create desire for follow-up services that
can be charged for.
But in the one-to-one world the Net promises, advertising will often be tailored and of higher quality. Those with
more money to spend will get higher-quality advertising.
The likely best course for content providers is to exploit that situation, to distribute intellectual property free in or-
der to sell services and relationships.
The way to become a leading content provider may be to start by giving your content away. This "generosity" isn't
a moral decision: it's a business strategy.
There are 12 pages of one nugget
after another - be sure to read it all.
Posted by Gerd Leonhard on Sept
21, 2008: If you haven't tried Twitter
you really should - if you need an
excuse, here's your chance
Update: Rohit Barghava has a nice
blog post on using Twitter for Market-
ing, hereTwitter is an absolutely
amazing tool for micro-communicating
with people in your network. I use it
both for streaming stuff that I am do-
ing, as I do it (well, mostly stuff such
as what I am researching, reading,
blogging watching, liking, working on
etc - not details about which coffee I
drink ;), as well as for sharing some
quick yet powerful realizations with
my 'followers'
You can get all tweets and all on my
new life-stream page, too (I know... it sounds kind of mad but it's easy to do so I figured I should try it).
Now, here is the key question: why should you try Twitter? What's the big deal? Here are some reasons:
1.
It forces you to be succinct and get to the point quickly - this is indeed a very good exercise, imho.
2.
It allows you to get into conversations with some very interesting people that you may have never met, otherwise -
I have met some great people via Twitter, and Facebook and Friendfeed, and my network has mushroomed as a
consequence (and yes, that does convert to 'business' eventually, as well - all good networks do!)
3.
It allows you to broadcast yourself and 'your brand' to people, but it does not interrupt them or forces them to lis-
ten, unlike, email (which is why I, personally, discontinued my email newsletters)
4.
As Steve Rubel says, the new web is not about sites - it's about services (and Twitter fits that category very well;)
5.
100s of brands and companies are starting to use Twitter to send quick updates to people who 'like' them - seems
like a great way to add value to a relationship that's based on merit and trust
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6.
So...kill the press releases and the email blasts - switch to Facebook, Twitter, Friendfeed, Seesmic, Kyte - and
start blogging if you want to talk to bloggers.
Enough reasons?
And if you think I am getting carried away with wasting my time on this... ouch
- check out these Twitterholics!
Posted by Gerd Leonhard on Sept 25, 2008 The paperless world is com-
ing! Reading via mobile devices is finally becoming a real option - Book 2.0 anyone?
For the past decade I have been looking hard for a new solution that spares me from having to print 100+ pages from
various websites and blogs every single day, only to subsequently stuff 1500+ pages in my computer bag and end up
making a huge mess in airport lounges around the world as well as on the plane, reading and desperately bookmarking
(high-lighting) the best stuff. A huge waste all-around and impossible to really retrieve anything.
Apart from reading even more PDFs like this one on my computer (which is far from convenient or easy-to-do), I have now
discovered that some of my many mobile devices are actually starting to be very suitable alternatives for reading printed
paper. Leading the pack here is of course the iPhone and the iPod Touch' and some select Nokia devices which I will
cover in a separate post - I currently use both but the iPhone's app-store does make it a lot easier to give this a try.
Not only can I now read webpages that I have converted and stored for offline
use via the cool instapaper app but now I can also read real books (well... not
fiction, really - that would be a stretch) using the eReader app for the iPhone.
The selection at eReader is not very large, yet, and the prices are quite high
(surely that isn't their fault I would reckon), and of course there's DRM galore
but it's still something worth looking at - convenience trumps those hurdles only
for early adopters like me, though, that's for sure.
I do wish that the publishers would wake up and see this as a much, much big-
ger opportunity than they seem to do, at this time: there is simply no reason
whatsoever for a book to cost $15 via the eReader - give me a break please -
there are no shipping and no printing costs. Darn - you could make this a real,
liquid, low-cost, ubiquitous global business.
In any case, what I do now is to save the longer web-pages on my instapaper page (on the computer), sync with iPhone
or one of my iPod Touch devices (it would be great to have that on the Nokia phones, too!), and then read it when in the
taxi, on the train, or in the plane. For annotating stuff, I simply carry a small paper (!) notepad and pen so that I can quickly
jot down the most important realizations from what I read - I have found that actually writing stuff down really makes a dif-
ference when trying to retain information, anyway, so that works fine for me.
Using Instapaper, the webpages are converted and very easy to read, btw, and scrolling is easy with the pro version.
Next, if I want to read a book, I think I'll start using eReader for that (I am trying it with the free books right now) - but here
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again, if I could have a flat rate now that would be good; don't punish me for
my interest, punish me for buying the dead tree version.
And if you live in the U.S. - which I don't - there is Amazon's Kindle which
seems to be making some serious headway and the OLPC XO2 (see pics on
Flickr) which allows book-like reading and looks great - hope they don't really
get stuck with the MSFT OS, though.
The bottom line is this, and I think it's really exciting: easy and comfortable
electronic reading is just now becoming a real possibility using mobile de-
vices, and this will have serious impact on the entire publishing industry, from
newspapers to magazines to books. As usual, if content owners and their
representatives can ease up on the Control a bit I think we're looking at an-
other huge opportunity for those that actually create the content to begin with.
The business models? Stay tuned - I am working on it;)
Posted by Gerd Leonhard on Sept 16, 2008 (via Midemnetblog) The Future of Music: more income from Attention
& Performance, less income from Copies - but overall growth once we accept this trend
I have recently been busy reading Kevin Kelly's 'Out of Control' book (the re-issued PDF) and his very insightful
'Technium'-blog as well as Yochai Benkler's great book "The Wealth of Networks" and wanted to share a few key findings
with you - the Future of the Music Industry is very much related to what Kevin and Yochai are writing about, whether you
want to call it Music 2.0 or not.
First and foremost, I believe that it is fairly certain that in the
near future we will see Attention Revenues eclipsing Copy
Revenues. Attention revenues can be described as either reve-
nues that come from licensed and monitored public perform-
ances (radio, concerts, broadcasts of any kind) or from more
indirect sources where music is receiving a revenue share in
returning for adding value to something else (such as a revenue
share from sites that run advertising).
New attention-based revenue streams will come from many flat-
rate offerings that will be rolled out in the next few years, next-
generation advertising, commercial sponsorships and product
placements, up-stream selling and cross-marketing, contextual
sponsorships and branding, linking and referring; and they will
indeed surpass the traditional copy & unit-sales revenues once
permission is given and revenues can be shared. This quote, by
Google China's President Kai-Fu Lee summarizes it very nicely "... mutual interest, rather than monopoly, is the key to
sustainable growth".
The recent launch of Myspace Music already drew comments that sound a lot like the model I am describing here - read
this column ad Adage.com. I forecast that during the next 3-5 years we will continue to sell less music products (whether
digital / downloads or physical / CDs) but will witness a constantly increasing number of access-based services (i.e.
streams, public performances, concerts, synchronization etc) that will be paid for 'with attention' i.e. 3rd parties will pay for
the music in order to have direct access to those users.
This future will bring many new and expanded kinds of attention-based revenues; albeit not really - and this is crucial -
from the advertising-as-we-knew-it, i.e. interruption-based advertising, pop-ups and 30 second commercials. Nobody
would tolerate this kind of advertising on their iPhone or IPTV channel or YouTube or the PSP - the new kinds of ads will
feel and look very much like content, themselves, and as a consumer I will want to see / hear / read them. But more on
that soon...
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The timeframe: I would say it will be 3-4 years for attention-based revenues to amount to more than 50% of the total
amount of revenues for the music industry (defined as recorded music companies and publishers - but that distinction, of
course, is quickly out-moding as well.) Note that this will probably happen much sooner in Asia (look at the Google Music
deal in China for example) where 'selling copies and no much else' has never been the chief money maker for the music
industry.
In this future many music creators of around the globe are very likely to generate more income based on what they and
their brand stands for, based on their fans / listeners / users having real, meaningful experiences with or through them,
and based on who pays attention to them, when and how.
Many of us in the music industry have always been aware that the concept of selling enough 'units' to make selling copies
the sole source of our livelihood has in reality always been reserved to those very, very few that are at the top of the heap
and manage to stay here, i.e. not in the so-called longtail... or even the upper body! But those hits are much harder to
come by now since people have a lot more choice and are therefore making more diverse choices - this goes for music
just like it does for restaurants, holidays and movies.
In our immediate future - both as actual content creators or as the companies and industries that serve them - it will be all
about gathering, keeping and then converting Attention.
In a web-native music business - and since there is no other option, this is where we are headed, kicking and screaming -
most musicians and songwriters will, again, make more money with attention and performance-related activities (i.e. not
just concerts but also web-casts, live-streams, on-demand and regular Radio, TV, synchronization, sound branding, music
in public spaces, etc) then they used to with selling actual copies of their songs or albums.
Soon, of course, it won't even matter anymore whether a use of music is deemed to be a copy or a stream (performance)
since all content will need to be legally available in the
network 'cloud', anyway, and it will be access that counts, not if it's a copy or a 'listen'.
We can already observe this trend by looking at the steadily increasing revenues of public performance organizations
(such as ASCAP, BMI - see this chart from eMarketer) while the rest of the recorded industry's unit-selling revenues (and
the so-called mechanical revenues) are headed for the vaporizer. eMarketer has some good comments on that trend,
here.
Let's take a look at how artists (and their representatives, in turn) can convert attention into real cash (Kevin Kelly lists
some similar points in his brilliant es-
say, here, calling them the New
Generatives):
* Public Performance (whether in
person or through an increasing
choice of media types - remember:
the Internet is indeed the next Radio
and TV!)
* Contributions to other people's
work and productions (contract work,
licenses, remixes etc)
* Endorsements by brands, com-
panies, sponsors, and fans (that's
pretty much how the music industry in
China already works I think)
* Referring, linking and connecting
to others that gain from the connec-
tion (generating affiliate and referral
fees)
* Lending Credibility and adding
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value by their participation (events, campaigns etc)
* Generating an increasing number of new up-stream revenues - once you have attention there are many ways to up-
sell your users to the next level of engagement!
So what is the future role of music companies i.e. publishers, labels, agents... the 'industry', if it's all about the creators'
brand and his/her increased attention? The answer may sound simple but the current paradigm switch-over phase is
tough, no doubt: future music companies will facilitate, syndicate, amplify, contextualize, catalyze, administer and most
importantly provide scale - anything that can repeatedly generate more attention and harnesses those new revenue flows
will be highly valued.
I personally think much of this will be done by SMEs (small and medium size companies) that will provide agency-like
services to the creators - but of course, once the web is actually ubiquitous and always-on, everywhere, scale and speed
will matter, no doubt, so yes - size can be an advantage then, too.
Posted by Gerd Leonhard on Sept 3, 2008: The Future Revenues for Content: Attention Revenues UP, Copy
Revenues DOWN -- get used to it.
Update: download and watch my flash-movie on "Paying with Attention". While watching some videos and reading the
latest writings of Kevin Kelly and Yochai Benkler, it struck me that we are indeed heading into a future of Attention Reve-
nues exceeding Copy Revenues - and I am talking within 3-4 years here, and probably much sooner in Asia where 'sell-
ing copies' has never been the #1 money maker for content creators.
A Future where all kinds of attention-based revenues (i.e. not just advertising-as-we-knew-it but revenue sharing of flat-
rate offerings, next-generation '2.0' advertising, up-stream selling and marketing, sponsorships and branding, linking and
referring, etc) will very likely surpass copy & unit-sales revenues. A Future where many content creators of all kinds, in all
locations, and within all levels of accomplishment will make more money based on what their brand stands for, based on
their fans aka users having real, meaningful experiences with or through them, and based on who pays attention to them,
when and where.
Selling enough copies of one's work (whether physical or digital, whether books, songs, movies, soft-
ware or games) to make this the sole pillar of one's livelihood has in reality always been reserved to
those very few creators that are at the top of the heap (i.e. not in the so-called longtail or even the
body).
And of course, being hit-driven, the companies that have marketed those that can sell millions of cop-
ies globally are the ones who will have the most to lose in the short term and during this paradigm
switch-over - Hollywood's latest disaster movies are not going to be the most-watched movies in India,
China and Brazil in the future, anymore.
In our immediate future as content creators and companies that serve them, it's all about gathering and converting Atten-
tion - at least until the world is so well-served with feels-like-free content in return for attention that physical copies be-
come desirable again (and they will).
Most musicians and songwriters will make more money with performance-related activities (i.e. concerts, web-casts, life-
streams, on-demand and regular Radio, TV, synchronization, sound branding, music in public spaces, etc) then with sell-
ing copies of songs or albums. In fact, in less than 3-4 years it probably won't matter anymore whether it's deemed a copy
or a stream since all content will be available in the network cloud, anyway, and it will be Access that counts, not if it's a
copy or copy - at least if you're not a recording industry lawyer. We are already seeing this trend if we look at the steadily
increasing revenues of public performance organizations (such as ASCAP, BMI, BUMA etc) while observing the rest of the
recorded industry's unit-selling revenues (and so-called mechanical revenues) heading for the vaporizer.
Attention
is the new
Currency
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Of course, most book authors (and there are increasingly many - with an estimated 3000 new books published per day)
already know that the real money in writing books is not
in selling them. Instead - just like with free / open-source
software creators - it's in the increased reputation, in the
bolstered credibility, in the enhanced public perception
where the income is: book authors get hired to speak,
ask to sit on boards of companies, join academic organi-
zations, advise governments, provide input on film and
TV productions, and so on. While nothing new, this is a
nice example for the rising importance of the Attention
Economy: a lot more people can now become their own
publishers and can have a go at becoming Author-
Brands; the gates are now wide open to either prove
yourself or be demolished by your peers (yes... it does
work both ways).
The likes of Twitter, Friendfeed, Google, Amazon and
Youtube have now given all of us a fairly reliable way of
checking what a writer's reputation and buzz is - and
faking it will become nearly impossible to do. The reality
is, of course, that 99% of book authors have nowhere to
go but up: their revenues from unit sales never did amount
to a meaningful income, anyway, so if Attention Revenues are the way forward... it's all up from here.
Film-makers and TV/Video producers have a lot to gain from this switch to attention-based revenues, as well, even though
high production costs will be initially hard to justify for small, niche audience productions - as many web-based TV start-
ups have found out, there is no real money in the long-tail TV/video market yet; mostly because only 3% of the world is on
broadband at this time, and those that are are paying too much for it (imho). But let's keep in mind that public performance
(i.e. showings) of motion pictures, TV shows and videos have always generated a very large part of the cash that came in:
box office revenues are, after all, nothing but performance i.e. converted attention-based revenues -- selling the experi-
ence not the copy. And as this won't change in the future, the movie industry still has a real leg up on the music busi-
ness.
So let's take a look how creators (and even their representatives) can turn attention into real cash:
Public Performance (whether in person or through an increasing choice of media)
Contributions to other productions (contract work, licenses, remixes etc)
Endorsements by sponsors and brands (that's pretty much how the music industry in China does it)
Referring, linking and connecting to others (generating affiliate and referral fees)
Lending Credibility and adding value by their participation (events, campaigns etc)
Generating an increasing number of new up-stream revenues - once you have attention there are many ways to
upsell your users to the next level of engagement!
So what is the future role of media companies, publishers, labels... the middlemen, the 'industry', if it's all about the crea-
tors' brand and increased attention? And if the users fka consumers also become involved in content (co)or(re)-creation...
what will happen to the definition of content ownership?
The answer sounds simple but the paradigm switch-over period will be tough: media companies (and those aggregating
or represent creators) must facilitate, syndicate, amplify, contextualize, catalyze, administer and most importantly provide
scale - anything that repeatedly generates more attention and harnesses those new revenue flows.
I think much of this will be done by SMEs (small and medium size companies) that will provide agency-like services to the
creators - but of course, once the web actually is ubiquitous and always-on, everywhere, scale and speed WILL matter, no
doubt, so yes - size can be an advantage then, too.
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Posted by Gerd Leonhard on Aug 31, 2008 : The golden age of streaming, moving from the hard-drive to the
cloud (Steve Gillmor): ACCESS first, not Copy
TechcrunchIT has a great post on 'the golden age of streaming', written by Steve Gillmor (yes, of the Gillmor Gang) - he
always has some very sharp things to share. Here are some highlights and comments, as usual:
First, some nice stats: "As the Olympics drew to a close with big numbers - 75.5 million streams (NBCOlympics.com), 40
million (BBC), another 130 million from the European Broadcasting Union, and 100 million Chinese viewers - the networks
were already moving on by serving the Democratic National Convention in HD.."
Now these kinds of stats will put some serious fear into broadcasters and cable companies - if this trend continues (and
once streaming gets over its inherent bandwidth and bottleneck problems), who would want to spend all that cash on ca-
ble TV (even if the do have DVRs build-in)? P2P streaming, anyone?
Steve goes on: "It used to be that having physical control of entertainment and other software was critical to the user ex-
perience. Record and film companies kept accelerating the quality levels of their products to stay ahead of the pirates and
the growing ability of consumers to capture and archive content off the radio and television networks..."
How true: physical possession is no longer really needed, in the very near future (right now this is still mostly geek-land
stuff) - and copyright will morph into usage right based on revenue shares.
Steve goes on: "This, of course, is the same shift software has undergone from shrinkwrap to service, from Outlook to
Gmail, Office to Google Apps, and from the hard drive to the cloud. In effect, productivity apps are now streamed to and
the data from the user. With the data stored redundantly in the cloud, we are more comfortable with a streaming situation
than with the former illusion that we “owned” our data locally"
Yes! And now some final marvels: "Once the user has undergone this reworking of trust, devices such as the iPhone and
the Slingbox have extended the notion of streaming to the car, the hotel room, to a friend’s house, anywhere...The shift
seems to be from ultimate quality to ultimate utility, to fit the data into the time available to consume it...Once the under-
ground streaming economy reaches a critical mass, media companies will reach some form of accommodation. Whether it
takes the form of advertising supported models or the emergence of viral talent going “direct” to consumers, the end result
will be the Net-based delivery of high value content under user control"
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Great stuff, Steve, all around. Despite some of the more negative comments on this post I think you are onto something
really crucial here. Maybe someone will eventually come up with a good P2P streaming solution to solve the bandwidth
paradox (i.e. the fact that the more people use the content the higher the cost becomes - unlike regular broadcasting
where it costs the same no matter how many people watch). I also agree with some of the other comments that this is not
at all about P2P vs Streaming - it's a question of radically changing user behaviors which will impact everything else in-
cluding advertising, marketing and the entire entertainment ecosystem: now it's access first, then copy (if at all). And this
does indeed signal The End of Control for a lot of the major players in current media ecosystem (i.e. studios, cable com-
panies, broadcasters, mobile operators..). Read more at my End Of Control book preview site.
Posted by Gerd Leonhard on Aug 24, 2008: Getting paid with attribution, attention, traffic, reputation: Open Soft-
ware Copyright Ruling tells us that attention equals money
Linuxinsider has a report on a recent case ruling at U.S. Court of Appeals for the Federal Circuit. The judge concluded
that open source coders are indeed entitled to copyright protection even if they provide their software 'for free' - because
they must get paid with getting credit & attention, instead.
"The original judge reasoned that because JMRI's code was given out for free, the company shouldn't be able to sue and
get money when someone breaks its license. The judge this week, however, reasoned differently. "Attribution and modifi-
cation transparency requirements directly serve to drive traffic to the open source incubation page and to inform down-
stream users of the project, which is a significant economic goal of the copyright holder that the law will enforce," the rul-
ing reads"
In other words, if I tell you, as part of my license requirement, that I want to 'get paid with attention' then this requirement
is just as valid as the requirement of getting paid with cash. In my view, this points toward the essential future business
model for intellectual 'property': I do have a right to get paid for what I create (if I want to), even though it may be free or
'feels like free', but cash is simply not the only kind of currency available - new kinds of payments are available to us now.
Posted by Gerd Leonhard on Aug 21, 2008: The Permission Problem & the Anti-Commons (via James Surowiecki
in The New Yorker)
Cross-posted from my The End of Control blog. Surowiecki, famed author of 'The Wisdom of Crowds' (which is a great
read btw), has published a column in The New Yorker which is well worth reading, as it covers the issues that arise from
too much, too deep and too long patent and copyright legislation. Here are some high-lights, below.
A great example of why it does not always work to rely solely on market forces to work it out (yes... such as in music li-
censes for Radio, and now, the Media / Content Industries and the Internet - the still-prevailing mindset of economic ego-
ism just does not make it possible to reach a win-win-win situation):
"In the second decade of the twentieth century, it was almost impossible to build an airplane in
the United States. That was the result of a chaotic legal battle among the dozens of compani-
es—including one owned by Orville Wright—that held patents on the various components that
made a plane go. No one could manufacture aircraft without fear of being hauled into court.
The First World War got the industry started again, because Congress realized that something
needed to be done to get planes in the air. It created a “patent pool,” putting all the aircraft pat-
ents under the control of a new association and letting manufacturers license them for a fee.
Had Congress not stepped in, we might still be flying around in blimps...."
"The commons leads to overuse and destruction; the anticommons leads to underuse and
waste. In the cultural sphere, ever tighter restrictions on copyright and fair use limit artists’
abilities to sample and build on older works of art..." Comment: more on copyright & control
here
"In theory, one should be able to break a gridlock by striking a deal that would leave all sides better off. Sometimes that
happens. Just the other week, for instance, Nokia and Qualcomm settled a three-year-long patent battle, which could ac-
celerate the spread of third-generation cell-phone technology here and in Europe. In a less contentious fashion, products
like the DVD player quickly became mainstream and affordable because many companies worked together to form patent
pools..."
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Page 31
My comment: this is where the real problem lies that bedevils the creation of the new, connected, web-native economy (in
my view): "Recent experimental work by the psychologist Sven Vanneste and the legal scholar Ben Depoorter helps ex-
plain why. When something you own is necessary to the success of a ven-
ture, even if its contribution is small, you’ll tend to ask for an amount close to
the full value of the venture. And since everyone in your position also thinks
he deserves a huge sum, the venture quickly becomes unviable. So the next
time we start handing out new ownership rights—whether via patents or
copyright or privatization schemes—we’d better try to weigh all the good
things that won’t happen as a result. Otherwise, we won’t know what we’ve
been missing..."
Comment: The key question is whether we can still afford to act
like this. Do we still extract the maximum cash out of a deal just
because we can, do we still exploit natural resources just be-
cause we (in theory) can, and do we still pound on copyright
rules just because we (by virtue of some rather antiquated
laws) can?
Posted by Gerd Leonhard on July 16, 2008: If you are into
the Future of Marketing do yourself a favor and buy Seth
Godin's "Meatball Sundae"
OK, so I read a lot of books (and... RSS feeds and other
shared stuff). But Seth Godin's new book, Meatball Sundae, is
one of the best marketing books I have ever gobbled up while
on some airplane going from one speaking gig to another. To
illustrate: I am pretty ruthless with my high-lighter in one hand, and pen in the other, and by the time I am through I can
always tell which book really got me going, simply by the amount of high-lighting I have done (or not, in most cases).
And my copy of Meatball Sundae was YELLOW, all the way thru. Every single page a real keeper, with morsels such as
"Coca Cola is no longer the most popular soft drink in the country. The most popular drink is "Other", none of the above.
The mass of choices defeats the biggest hits."
And: "The 'operating system' for marketers is now fundamentally changing. It doesn't matter how big your
market share is today. If your product and your marketing are optimized for the older model, you will be
defeated by the relentless tide of the New Marketing and the products and services that are designed for
it."
Plus I love his writing: easy to read, to the point, structured paragraphs, clear. So, for once, forget the
feeds, the tweets, the podcasts... read a book. This book.
Posted by Gerd Leonhard on July, 2008 Music 2.0: The new indie model (Via TechNews World)
Andrew Burger from e-commerce news interviewed me for this TechnewsWorld feature on Music 2.0 and it came together
quite nicely I think. So feel free to Digg it... or do all that other social media sharing forwarding communing stuff to it ;).
Some snippets: "The use of Web 2.0 technologies in the music industry has changed the market forever, with musicians
promoting themselves online and interacting directly with their fan bases...." "Getting the users involved is the No. 1 trend
pretty much everywhere right now' (yes, from me... and more:) "What I call 'Music 2.0' is now very quickly becoming the
mantra for the major labels: a Web-native music ecosystem," Leonhard told the E-Commerce Times. "More and more
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Page 32
artists will be able to 'go direct' from the start and
engage their fans from the get-go; both for creation
as well as for marketing. "Once more than 2 percent
of the world is on broadband, this kind of 'networked
creation' will explode. Much of it won't be that good,
of course, but talent will rise to the top regardless.
Bloggers are now like DJs: They pick bands to play
and talk about, and become powerful super-nodes,"
Leonhard noted.
Posted by Gerd Leonhard on July 14, 2008: The
abbreviation of everything - my comment on The
Immediate Media Age (GigaOM)
Om Malik writes: The Immediate Media Age: Of
Broadband & Blogs - GigaOM.
"Our whole lives are about doing more in less time,
trying to cram everything into 24 hours, in a day that is filled with constant interruptions. Instant messages, emails, and the
constant chirping of cell phones have surely and slowly squeezed our attention spans. We have responded this to cus-
tomizing the digital world according to how lifestyles. We have TiVo to personalize our television, watching only what we
want. We plug in our iPods, using playlists, instead of listening to the radio waiting for our favorite tune. Like TiVo and
iPod, the web allows us to customize what we want to read. Blogs offer short bursts of information in an easy to digest
format that fits nicely with this socio-culture change happening around us. Blogs, also have the ability to focus on niche
topics, allow almost anyone to publish, and then have it distributed over high-speed Internet connections instantly is what
can be summed up in two words: “Immediate Media.”
My comment: This is from Om's blog about a year ago but I just ran across it. I sometimes call this development 'the ab-
breviation of everything' and this trend is quite scary as well as somewhat
invigorating. Either way, I think we will not stop here (i.e. shorten everything),
and if we think about the future of a connected ecosystem - a mass of 4+
Billion people with mobile devices - it will certainly look quite different from
what the early adopters such as Om and myself are willing to endure (as
'usators' i.e. users+creators)
I think the increasing shortening of people's digital attention span, and the
trends towards reading and writing quick blurbs and instant nuggets of wis-
dom (of which I am plenty guilty myself) will sooner or later spawn a trend
back towards deeper reading and writing, just like the success of the console
game GuitarHero has resulted in a rise in guitar sales and interest in 'real musicianship' - it will just take a bit longer be-
cause:
Posted by Gerd Leonhard on June 19, 2008: Billy Bragg says: Internet Music needs to be licensed like... Radio
I like Billy ;) Interview: Billy Bragg. "Much more clever would be to find an-
other revenue stream other than the consumer," he said, citing the possibility
of seeking payment from advertisers or Internet Service Providers. "It's the
basic principle on which radio operates," he said. "Radio is free to you as a
consumer, but when my song gets played on the radio, I get paid for it."
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Posted by Gerd Leonhard on June 19, 2008: Gin, Television, and Social Surplus - Here Comes Everybody (Clay
Shirky)
Clay Shirky's got some good wisdoms here:: Gin, Television, and Social Surplus - Here Comes Everybody. "And it's only
now, as we're waking up from that collective bender, that we're starting to see the cognitive surplus as an asset rather
than as a crisis. We're seeing things being designed to take advantage of that surplus, to deploy it in ways more engaging
than just having a TV in everybody's basement..."
"How big is that surplus? So if you take Wikipedia as a kind of unit, all of Wikipedia, the
whole project--every page, every edit, every talk page, every line of code, in every lan-
guage that Wikipedia exists in--that represents something like the cumulation of 100 mil-
lion hours of human thought. I worked this out with Martin Wattenberg at IBM; it's a
back-of-the-envelope calculation, but it's the right order of magnitude, about 100 million
hours of thought.
"And television watching? Two hundred billion hours, in the U.S. alone, every year. Put
another way, now that we have a unit, that's 2,000 Wikipedia projects a year spent
watching television. Or put still another way, in the U.S., we spend 100 million hours
every weekend, just watching the ads. This is a pretty big surplus. People asking,
"Where do they find the time?" when they're looking at things like Wikipedia don't under-
stand how tiny that entire project is, as a carve-out of this asset that's finally being
dragged into what Tim calls an architecture of participation
"No one who works in TV gets to ask that question. You know where the time comes
from. It comes from the cognitive surplus you've been masking for 50 years."
Posted by Gerd Leonhard on June 16, 2008: The Fear of Change - and why we must get wet if we want to learn
how to swim!
I am very fortunate to meet a lot of interesting and open people at my various keynote speeches and think-tank engage-
ments - from 20-year old, hungry newbies to 60+ year old CEOs; in Asia, Europe and the U.S. Sometimes I think I inad-
vertently learn more from them then they do from me (but... don't tell anyone please).
In many conversations, fear is one of the biggest stumbling blocks I encounter again and again. Fear of change, fear of
the unknown, fear of being excommunicated because of 'holy cow violations', fear of questioning authority, and of course:
fear of losing control, in all its variations. Deep seated fears (and the associated, often unaware believes and assumptions
that cause them) are what puts the boot on a lot of urgently needed changes, often leaving us disadvantaged and unpre-
pared. Fear tells us to shut up and just continue down the path that we know and trust - don't be a fool and stray away.
The most gripping fear, of course, is to suddenly and irreversibly lose control because some carefully worked-out logic,
social chemistry or business tradition is crumbling due to some tiny thing that has been messed with, one harmless mo-
lecular change that endangers the entire formula. Instinctively, we therefore avoid those moments of uncertainty, those
treacherous waters that may sink our ship because we run into an unexpected cliff or get stuck in the sand.
The problem is that if we always stay in safe and well-charted waters we will most of the time not reach new shores, ever;
instead we only glance at them while we sail by and peer through our telescopes. Therefore, we don't get a real feel for
what it would be like, while our fears keep suggesting that it's not worth it to deviate at this time. Many of us therefore
keep coming back to the same 'beaches' that we know and trust; others just follow those courageous (or foolish?) pio-
neers that have the new turfs scouted out, already.
In the media and communication industries, fear is one of the key hurdles for change, and for facing the huge paradigm
shifts that require us to happily sail into new lagoons and probe new waters - we fear these changes because these wa-
ters are utterly unknown, and our map just shows blank spots. Sometimes we can send others, and if they perish we feel
bad but vindicated in our fears. If they land in a nice tropical paradise we swiftly follow and reward them richly for taking us
along (se NewsCorp & Myspace, Google & Youtube, CBS & Last.fm...). Let someone else be fearless first looks to be a
better strategy.
But just for a moment, let's take a look at the most popular fear inducers:
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Markets are conversations (fear-fueled reaction: "omg: do I have anything good to say.... will I ever get a word
in.... will anyone ever listen to me again... how can I do talk to all these people and still get any work done... is
everyone going to call me now?)
The LongTail (fear-fueled reaction: omg: will all this niche content prevent me from getting attention for my expen-
sive hit content... if more people consume niche content where will my mass media viewers come from... if ama-
teurs can be journalists what do I get paid for... will the world just turn into a huge user-made content landfill...?)
The End of Control (fear-fueled reaction: omg: how do I make money when I can't force people to pay me),
Peer Production - Now, Users are Content Creators, Too (fear-fueled reaction: omg: now we are losing our mo-
nopoly on ideas and creativity, and the world will be knee-deep in meaningless content)
Posted by Gerd Leonhard on May 31, 2008: a couple of important keywords that keep popping up in my speeches
(and everywhere else)
I have done 10 or so presentations and speeches in the past 4 weeks, all over the place and on many different topics, but
these key subjects, below, keep popping up; so I figured I could share them with you.
The good old Longtail (i.e. the concept of the digital economy enabling substantial revenue streams with or from
content or products that are much lesser known, i.e. not 'hits') - the antidote to the Hit Economy that we've had in
media for a long time (in music, I call this the Rolls Royce or Bicycle Syndrome). Read Chris Anderson's Longtail
book or his blog to find out more, or dive into all the stuff that I have written about the Longtail. Yes....I know this is
an old hat for many of you but it still needs to go into this list.
Wikinomics: the concept of mass collaboration changing 'everything', as set forth by Don Tapscott in his mind-
boggling and inspiring book Wikinomics. Wikipedia notes: "according to Tapscott, Wikinomics is based on four
ideas: Openness, Peering, Sharing, and Acting Globally" Well... read for yourself but these concepts are every-
where now, and reinforcing each other, too.
Paying with Attention: this is a central point for the formulation of new Advertising 2.0 scenarios: users will indeed
pay with their attention to ads (or rather, content that advertises products;) in return for receiving free content. I
have, of course, made a video on this, here, and have pontificated on this all over the place, but this is still very
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much work in progress. PWA goes with those juicy keywords of Freemium (as coined by VC Fred Wilson), and
FeelsLikeFree.
The End of Control: the concept that in this networked economy control-obsession causes loss of relevance and
consumer trust, user-rejection and overall decline (yes... the music industry is a great
example!), while reliance on openness, and furthering trust and engagement can breed
success. Of course, I have been working on this topics a LOT lately, given that I am slav-
ing away on a new book on this topic (subtitle: Open is King), you can dive into some
previews here. Erick at Techcrunch wrote a nice piece on this topic, too.
Last but not least: Markets are Conversations. Media is 2-way. Don't just
talk TO people, talk with people. Yes... the good 'old' Clue Train Manifesto.
Posted by Gerd Leonhard on May 30, 2008: Telcos vs Content Industries: good read via TelecomTV
I just read this column on Telecomtv.com. It nicely outlines the recent proposals of various industry organizations to put
more pressure on telcos and ISPs to police their networks and curtail so-called digital piracy. My Highlights and com-
ments: "Whatever the recipe, the thrust is the same: that one industry (ISPs and telcos) be made to expensively enforce
the unsupportable business model of another by chasing down its own customers! It's absurd, but if the recent past is
anything to go by the real pirates in this long-running piece of Kafkaesque content (available free) will get away with it and
will see their oppressive and, ultimately self-defeating, proposals become law.."
Comment: there is no chance this will become law. The EU Commission has already expressed disdain for such a devel-
opment. Here is my comment on what I think of a policed internet (as was proposed by Paul McGuiness, Manager of U2,
at Midem 2008).
And here is something really scary: Under the 'three strikes' rule (a strangely Anglo-Saxon nomenclature given the sensi-
tivities) offenders get email warnings and then get their accounts closed. Meanwhile (in return) entertainment companies
will end annoying copyright protection on French material so that music and video bought online can be played on any
device (if the new regs work there would be less need for the DRM protec-
tion). Now the French think they're going to export this outrageous imposition.
According to Sarkozy: "Everywhere in the United States, in the United King-
dom and elsewhere, professionals and governments have tried for years to
find the 'grail' to fight the problem of Internet piracy. We are the first, in
France, to form a big national alliance around concrete and effective propos-
als." M. Olivennes has already been off promoting his legislation in Canada
and claims to have had a good response...."
In Canada? I don't think so. Ian Scales, the author, then nails it down pretty
good: "Essentially, the moves are a concerted attempt to give the kiss of life
to outdated, dying business models based on extortion...." Read my com-
ment on just who is liable here: the liability for monetizing this development
rests with the Content Owners not with the Networks. Put up (i.e. license) or
shut up - to speak frankly.
Posted by Gerd Leonhard on May 30, 2008: The Flat Rate for Digital Music is coming: Google Elbows Into China
With Free Music (ECommerce Times)
Some quotes and comments: "The deal would see Google and Top100.cn offer Chinese users free digital music down-
loads and other services, including free access to a database containing information on their favorite performers such as
concert details, links and special ring tones. It is not known whether the music downloads and service will encompass the
recording labels' full catalogs or simply tracks from Chinese artists. For their trouble, the music companies will reportedly
receive royalties based on individual revenue-sharing models being negotiated with Top100.cn and Google" Isn't that how
it should work everywhere??? But here is why it'll be done in China first: "While China has one of the largest potential
markets for purchasing music online -- it has as many broadband connections as the U.S. -- more than 99 percent of mu-
sic downloads distributed in China are pirated.."
So does that mean we need to have 99% of all music "pirated" in Europe, as well, before we can get this going here, as
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well? When the pain gets big enough.... I wrote in Oct 2005 (!!) "Looking at the larger picture, Google has chosen to
launch its music service in China to "test the waters," said Susan Kevorkian, an analyst at IDC "We believe that Google is
testing the waters of the online music service market and that this may be the first of other paid online music initiatives to
come from the company over the course of the year," she told the E-Commerce Times. "The company's timing is good --
the major music labels are collectively supporting legitimate sales of DRM-free, MP3-encoded music, which means that
Google and other online music service providers can offer music that's compatible with the installed base of iPods, as well
as other MP3-enabled devices," Kevorkian continued..."
FINALLY. Google could have been licensed to offer music for the past 5 years - both streaming and downloading. Can you
spell CONTROL-OBSESSION?
Posted by Gerd Leonhard on May 26, 2008: Ed Peto on New Music Models in China (leapfrogging into Music2.0) -
Music2.0 is Asian.
Ed Peto has a good post here. The article was originally written for MusicAlly. Here are some high lights and comments:
"China never fully adopted the “traditional” tools of music discovery and consumption: TV, radio and the print press are all
heavily monitored by the government and relatively anodyne as a result; CDs never really gained any meaningful traction;
live music events are circuses of permits and arbitrary cancellations.The bleak circumstances of China’s music business
have resulted in the Chinese consumer inadvertently leapfrogging into the next generation of music consumption, even
before their western counterparts."
Comment: Music2.0 is Asian. And maybe European. Definitely not American.
"The internet has not only afforded a freedom of expression and identity previously unavailable to the Chinese, it has also
almost totally usurped the roll of all offline music media: portals, webzines, bulletin boards (BBS), video sites, music blogs,
music streaming. In fact, so important has it become as a medium that a full 86.6% of all netizens use the web to listen to
music – the highest of any usage including search and email...."
"Full track downloadable MP3s have been (illegally) free to user from the outset, partly because 86% of internet usersarn
less than $430 per month and partly because China’s poorly enforced copyright law is only just becoming a topic of public
debate ie. too late...." Comment: and it looks very much the same in India, Brazil, Indonesia, Rus-
sia - how else can music make money here if it's not BUNDLED into other services i.e. flat-rated,
feels like free. Copyright won't help - all-you-can-eat usage rights (licenses) will.
"Leaked reports earlier this year suggest that Google China (g.cn) are planning on partnering with
legal music site Top100.cn to offer free-to-user major label catalogue found through Google MP3
search. This arrangement, due to launch towards the end of 2008, would allow Google to compete
with incumbent behemoth Baidu in the music search sector but would also signal a seismic change
in music consumption: major labels conceding that music must be free-to-user. China is increas-
ingly being seen as a brutal testing ground for radical new models that can survive in a “more than
99%” (IFPI) digital piracy market..."
Comment: this will be a huge shift if it happens - Asia may show the way. Music Like Water. Feels
Like Free.
China will
soon be-
come the
number one
English-
speaking
country in
the world
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Posted by Gerd Leonhard on May 21, 2008 : Future Stories #2: The Future of Telcos - Content & Service Pipes
Traditionally, telecom companies simply offered various types of phone services and connectivity, and moved lots of data
around - maintaining and constantly improving pipes & networks was the primary mission. Today, the basic connectivity
offerings have become seriously commoditized: prices are dropping towards zero in a ‘feels like free’ way, and due to the
ever-increasing P2P action the comfortable old position of being a ‘dump pipe’ is no longer a viable option, no matter
which way you look at it. The bottom line is that there is no way that Content and Services will not end up packaged into
those expensive pipes, cables and wireless networks. But take note of those keywords: PACKAGED and BUNDLED and
Feels Like Free.
Increasingly, the Future of Telecoms is more in the com than in the tele; in facilitating communications based on, around
and ‘lubricated’ with Content and Services. Voice traffic will only be a small and probably diminishing slice of the pie here -
similar to how CDs and digital music ‘unit sales’ will make up only a fraction of the future revenues of record labels.
In a networked ecosystem that wants to serve and empower those pesky ‘always-on’ digital natives, telcos and operators
have no choice but to branch out into adjacent or even completely alien sectors - if they don’t, other players such as de-
vice & handset manufacturers, web portals, social networks and search
engines will feel compelled to fill the gaps and push the pipe & network
guys further and further down to the bottom of a digital ecosystem that has
only just now begun to flourish (remember: only about 2% of the world is on
broadband, today - there is a long way to go, yet). Imagine a Facebook
Mobile Network, a Samsung Mobile Video Platform, and (of course) a Goo-
gle eBook Reader?
Photo via Kevin Kelly
Clearly, those Web0.0 ‘dumb pipes & walled garden’ concepts are dead and
gone - now it is all about what comes through those pipes, not where they
come from. And crucially, content must now be defined much broader: not
just as a piece of ‘professionally made’ and bona-fide copyrightable work
that is being transmitted but also inclusive of all the surrounding user interac-
tions, attention kernels and clickstreams (oooopps... sorry for the geek speak). Context becomes very valuable Content,
too.
TwitterMusic, Google VidRead, Gone.MTV, Skype.TV, MotoTube…
For telcos, it’s about time to get into a new game, and it’s called Media2.0 - a vast and mind-boggling opportunity for
(pro)aggressive networks to literally leapfrog over some of those incumbent and still future-shocked media companies,
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giving birth to or simply fueling new disruptors that could very well be the next Viacom, CBS, BBC or
Warner Music. Deutsche Telekom, Orange or Telefonica should have bought Last.fm, not CBS!
Now, witness Nokia packaging UMG’s and SonyBMG’s music into their handsets, and sell it together.
Witness Google trying to package ‘free music’ into their Top100.cn search engine in China; witness
CBS’s Last.fm API’ing ‘free interactive, on-demand music’ into social networks. Services such as
Last.FM, Pandora, Flickr and Twitter (and there are many others) already make heavy use the telco’s
networks to ship and distribute data at an ever increasing pace and volume. Now, many telecoms
and network operators around the world are starting to realize where their future is taking them: Con-
tent + ConText+Communications+Services+ Ads2.0.
So let’s plot a few futuristic scenarios:
Twitter may just start to provide pre-loaded content-’links’; users would be able to receive mes-
sages with a hot medialink to a file that is pre-loaded somewhere, and instantly stream it via
any flash-enabled mobile device. MicroMedia anyone?
A telco (Verizon? SingTel? TMobile?) will buy whatever is left of SonyBMG when Bertelsmann
finally drops out of the joint venture; and SK Telecom may well end up buying a majority stake
in Warner Music, globally (they do already own 50% of their Korean JV with WMG). My take is
that Music2.0 is likely to coincide with Telco2.0 if the large (but quickly shrinking) music con-
glomerates and the forever-at-snail-pace music rights organizations keep on playing hard-to
get with anyone that has the audacity to want to actually use their music legally.
China Mobile will start ChinaSpace, a social network build around content that is generated
entirely by the users (or shall we say Usators).
Within 18-24 months, a major telecom (Vodafone? Telefonica? NTT?) will announce that they are
entering the music business. They will start from scratch, unencumbered with back-catalog, contracts and Music1.0 (;)
people and concerns, working with new artists and with those well-known brand name acts that have finally left their la-
bels for good, riffing off the various Music2.0 blue-prints that have been making their way around the Net (including my
own humble Music2.0 book I hope;). This will be fueled by the fact many incumbent record labels (no, not just the major
labels and the RIAA) have famously succeeded in being ubiquitously hated by the music fans i.e. the users, their artists,
the general public, and - you guessed it - the telecom execs, themselves. 10 years of back-patting and spending 100s of
Millions of $ to convince these guys to somehow give the consumers what they really want - no wonder there is serious
thirst for revenge here. Telcos are fed up and will cut their slavish ties to the old major label system in the next 9-18
months.
Flat-rate music offerings will become a standard - and fuel the telcos of tomorrow. Smarter toll-booths for more traffic.
Skype will be sold by eBay to either a major social network (F….k?) or a major telecom, and will come back full circle to
how it got started: a powerful network for sharing data the cheapest possible way, be it phone calls or other bits and bytes
i.e. content (read: music, film, TV, books...). Skype is where legal P2P will happen,
first.
Within 12-18 months, together with Google, one of the leading advertising and
communication agencies will strike a deal with a major telco and jointly launch ad-
supported and user-generated content services based on an Advertising2.0 ap-
proach, completely side-stepping traditional content production and licensing pro-
cedures and offering new artists (and out-of-contract acts) yet another way to go
direct.
So, dear Telcos, Operators and ISPs, here are my 2 cents:
Stop worrying about pleasing the incumbent music & media industry players and ‘the studios’- either they will fol-
low your lead and give 5 Billion users what they want, how they want it, or you need to leave them behind as
quickly as possible
Play your hand now for it is strong: you have the network, you have the users, you have the billing relationships -
you can get the content the way you need it, too!
Like the Radio and Broadcasting Industries before you, start by demanding a new, standardized blanket license
for full-length, interactive music streaming followed by unlimited downloading of music on digital networks; and
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while this is being negotiated start making deals with Ad Agencies and Advertisers to prep the Advertising2.0
pipeline.
It’s music first and then Film, Video, TV…. $700 Billion of Advertising per year are ready to be traded in this battle
for content in return for attention. Seize the day.
When: 18-24 months
Where: everywhere
Impact level (from 1-10): 10
Opportunity rating (from 1-10): 8
Some sources of Inspiration for this Future Story:
IBM Future of Advertising Report
Telco2.0 Two-sided business model
Telco2.0 Blog
Posted by Gerd Leonhard on May 8, 2008: Britannica Online: Free Access for bloggers and web publishers - fi-
nally ('feels like free' and still making money?)
I have written about Feels Like Free / FLF a lot. Today, I ran across this column at the newly revived Industry Standard
(which I quite like, btw), called "Free can disrupt your business". I particularly like the short list of new models that are
based on 'Free' - well worth a read, and echoing some of Chris Anderson's recent explorations which I find quite inspiring,
as well.
Here are some key snippets from the Standard:
"Free" is disruptive. It can create value. User generated content, in the form of videos provided for free by users to You-
Tube, created a valuation of $1.65 billion when they were purchased by Google. Or it can destroy
value. The easy availability of free music, though not always legal, has decimated the music busi-
ness. We have become a knowledge-based society. The flow of information -- the bits as opposed to
the atoms -- is virtually frictionless. It costs money to copy a CD, but the digital information can be
replicated infinitely at no cost other than bandwidth. That economy has led to the creation of
many types of free services..." [see the list at the site]
Very much spot-on but what I found most enlightening was the link to the new Britannica Online (see below) which offers
bloggers and other non-commercial web publishers free access to Britannica online (needless to say that I registered
but have not heard back
from them yet - hope this
is actually real!):
"The other day the Ency-
clopedia Britannica an-
nounced that it would now
be free for Web publishers
-- bloggers, webmasters,
or writers. You could pay
$1400 for the 32-volume
printed set of books, or
you could pay for the on-
line service..."
Here is a shot of their FAQ page with some key statements underlined: now, if this is not evidence for the drastic changes
we are seeing in content commerce and publishing, I don't know what is!
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Posted by Gerd Leonhard on April 23, 2008: Broadband2.0 (via Wired) - and then: Content2.0 and Copyright2.0...?
Wired has a good feature on what they call, of course - but hopefully with some mocking intentions - Broadband2.0. As I
have said many times before, we are just at the tip of the iceberg as far as SHARING of Content is concerned, and we will
need an altogether different logic of copyright and understanding of 'content' monetization to deal with this. I shall pontifi-
cate further on this, in the future, but for now check out this short video.
Here are some high-lights from the WIRED feature, and my comments:
"Now two of the largest ISPs in the United States are hoping to kick off yet another broadband renaissance, this time with
home connections that promise to reach 50-100 Mbps, enabling a slew of high-definition content, better-quality video-
sharing sites and even 3-D video. Call it Broadband 2.0. Experts say this increased bandwidth -- when it becomes widely
available -- will have a profound effect on everything from our social interactions on the web to the way we consume me-
dia."
My comment: High definition is certainly the key to a meaningful content con-
sumption (or shall I say 'content engagement') on the Net, in the long run. For-
got those lousy MP3 sounds and give me full CD quality - another 3-4 years
and we'll have that, as well, imho - and I just can't wait.
"Mr. Waters says that first and foremost, we can expect everything to go high-
definition: We'll download HD movies from Netflix, upload HD content to You-
Tube, and watch more sophisticated HD content on our televisions. The added
bandwidth may even spur development of extra goodies, like stereoscopic 3-D
video and high-fidelity audio. Believe me, the minute someone puts the pipes
out there, people will find a way to use them," Waters says."
My comment: this is why Telecoms, ISPs and Wireless Operators must engage
with Content NOW. It's time to leave the good old idea of the 'stupid pipe' be-
hind and move onto the Service + Content Pipe concept. This, to me, means a
concerted push
for new content licenses and flat rates. The Internet is the
new Broad[Narrow]Casting Platform, and it needs to be li-
censed accordingly. This is not at all an argument for ISP
liability - rather, in my view, the liability for monetizing this
development rests with the Content Owners not with the
Networks. Put up (i.e. license) or shut up - to speak frankly.
"If you put a 60 Mbps service out there, people are also go-
ing to want to have services associated with it. Yet no one is
going to create those services unless the 60 Mbps is there,"
Water says. That hesitation may not last long, because con-
sumers always find ways to use up whatever bandwidth is
available -- and then some -- says Rudolf van der Berg, the
author of a recent study on the future of fiber networks
(.pdf)."
Content is now Context and Conversation, too - and there-
fore, and in this new definition only, is King, once again.
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Posted by Gerd Leonhard on April 28, 2008 at 05:12 PM: Music in 2015 - Totally Secure, Really (like... completely)
Scarce and So Very Very Valuable (again)
Warning: this is fiction. For now.
The herculean efforts of the world's most eminent legitimate music rights- and intellectual property owners, represented by
the RIAFPIAAMP (the all-encompassing global content producers' organization led by former U.S. President George
'Hard Work' Bush whose favorite battle cries "We have a right to get paid a lot more, dammit" and "Copyright-is-worth-
dying-for" are now found even on free coffee-mugs and roadside bulletin boards) and the organization's numerous allies
from law enforcement, the military and leading anti-terrorist experts around the world have finally been victorious: Music is
now 100% scarce again, and the threat of hardened juvenile criminals and the so-called Digital Natives freeloading via the
Internet without restraint has been eradicated.
The War on Sharing was costly, indeed: tens of billions of $s, Euros, Yens and Rupees were spend and some unfortunate
collateral damage had to be absorbed as well, but finally the battle has been won by the rightful leaders of the global mu-
sic industry corporations - music is, once again, totally and permanently secured and under the rights holders' exclusive
and unflinching control. Copyright is sacred again - hallelujah.
No device can play any music whatsoever unless it has been authorized by the Central Music Device Approval Authority
in London. All music recording devices are forbidden, period, and special permits are required to even mention their exis-
tence. Robotic device-control-squats patrol the subways, clubs, bars and schools around the globe, looking for RFID
pings from any device that could be used to engage in stealing. Unless a device is properly authorized to deploy music, a
user attempting to do so will get a recorded and looped message alerting him to the fact that the device is illegal and that
he needs to cease his activities immediately.
Repeat offenders that do not follow the warnings may suffer severe burns on their fingertips, courtesy of the new Burn-
ThoseThieves hard- and software that is now embedded in all audio devices, thereby making these criminals easily identi-
fiable to the global MP7 (Music Protection Prevention Prohibition Purposeful Peer Panic Production) task force that has
been set up since the Criminal Music Consumption Act (CMCA) was passed in 2011. Hospitals everywhere are fully col-
laborating.
No ISP, telecom or wireless operator can move even a single 0 or 1 of any registered piece of music (and soon, film or TV
show, photo, logo, txt file, pdf or any other of the 387 indexed file formats) through the network unless it is listed on the
'approved for network distribution' list. All telecoms around the world must get written approval for any data transfer that
could be perceived to contain intellectual property; apart from voice (and even that is monitored as well - see below).
This slows things down things just a tiny bit but one can still get a 12k stream on the paid-for and authorized on-demand
music providers pretty much any day; this is hugely popular in penal colonies, on arctic cruise-ships and at genetic food
research labs all over Siberia and New Mexico. Finally, ISPs can keep their noses & pipes clean and concentrate on run-
ning their networks without worrying that copyright crimes will be committed through them - a great relief to everyone!
Consumer-to-consumer bluetooth file transfers using cell phones and other mobile devices were disabled years ago,
when the RIAFPIAAMP sued Samsung, Nokia, Motorola and Apple for 250 Billion dollars - and won. This was directly af-
ter the UMMFFRECUR (the United Music Managers for Forced and Really Equitable Content Use Remuneration) and the
CPFELC (Content Publishers for Eternal Life of Copyright) teamed up with the RIAFPIAAMP to force BT, France Telekom,
Verizon, China Mobile, T-Mobile and Vodafone into shutting down their networks until they could finally clean out the mu-
sic pirates, for sure. 18 months without wireless services sure taught everyone a lesson!
Apart from Bluetooth transfers which are just not legal, period, wireless file transfers of any kind must now be approved by
the CWCTA, the Central Wireless Content Transfer Authority in Guetersloh, Germany, but most consumers don't even
dare to apply for a permit since they would be certain to have their names entered into their MicroGooHoo NetworkID file
system which prevents undesirable individuals from entering places where any attainable content could be found, such as
clubs, bars, music stores, airports, libraries and schools.
Automatic 1strike+out(TM) network disconnection is build into all computers,digital Radios, TVs and mobile devices,
worldwide. Playing any piece of music that is longer than 1.2 seconds and that is not properly approved results in immedi-
ate disconnection from the Internet. The software was developed by the German Army and it's doing a fabulous job here.
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Anyone that has been disconnected must apply for 'reinstatement of connectivity' to the
Internet Re-Connection Investigation and Approval Authority in Dublin, Ireland, led by a
subsidiary of a well-known music management and artist branding company that has
been able to patent the serious-infringer-detection technology back in 2008.
Anyone that is caught capturing and uploading an image or a video of an artist that is
represented by the RIAFPIAAMP or their sister organization, the World Content Owner-
ship and Administration Committee (WCOAC) will face immediate remote destruction of
all memory contained on his or her equipment. In order for this to work flawlessly, all
memory chips and hard-drives are now wirelessly connected to the Central Content Se-
curity Database in Langley, Virginia and Nice, France. Repeat offenders will be barred
from buying any digital equipment, whatsoever (including coffee makers, watches, wash-
ing machines or toasters) and anyone lending such equipment will be considered guilty of
contributory infringement.
Since 2011, all private phone calls are monitored by United Phone Call Screening Sys-
tems (UPCSS) in Mumbai, India, on behalf of the WCSC, the World Content Security
Council (based in Geneva, Switzerland) since the rapid increases of unauthorized public
performances of music on mobile phones has led to losses of billions of dollars to the
rightful owners and wardens of the master recordings and compositions. People calling each other to listen to music has
been officially declared THEFT in the 2012 Singapore Total Rights Forever Treaty (STRFT). The system is working so
very very smoothly that only those pre-approved and fully licensed users that have adequate legal representation in at
least the 100 WCSC signatory countries can actually listen to music via digital devices at this time -everyone else's at-
tempts at enjoying music without proper permission has been thwarted so that the monetary value of music can be main-
tained, and even elevated, again.
Thankfully, a new format, the UeberCD, has been launched by AppSonips a year ago and that's pretty much the safest
and cleanest way you can get music now - pay before you listen, while you listen, and after you listen - the way it should
be! Everybody has to buy UeberCD players and sound carriers in the UeberCD format, and there is only one authorized
place in each country that can produce them. Each player unit and each UeberCD is equipped with a wifi / wimax / GSM
chip as well as with RFIDs, making it easy to find out how many times people are playing the music, where, and when,
and helping honest people stay honest, and not exceed the permissible maximum of daily plays.
All UeberCDs that leave the country where they were produced automatically lock-up and stop working, and the self-
destruct. In most cases, the authorities are alerted, leading to many arrests of hardened criminals all over the world.
Music making is restricted as well, and subject to a 'official creator license', since many people disguising as musicians
had taken to secretly listening to the artists and songs that they liked a lot, using old analog equipment of the late 90s, and
were thereby influenced by ideas and inspirations that they had absolutely no rights to, whatsoever.
Now, with the new government 'License to Rock' Version 2.98 it is finally possible to produce new music without con-
stantly flirting with accidental or inadvertent copyright infringement: musicians and composers must subject to a strict
clearing procedure by the Creators Approval Committee before they are allowed to use one of the many RIAFPIAAMP's
Creative Bunkers where they can go about their work in total isolation for a minimum of 15 months before they can sur-
face again. Now that's what we call clean!
All in all, this is a great world to live in: clean, orderly and all-paid-for, all the time - welcome to Music 2015.
Some of this story is influenced by a recent read of Cory Doctorow's book 'Overclocked'
Posted by Gerd Leonhard on April 28, 2008: Economics of Online Video 3: $5 Net CPM = Keep Day Job* - Silicon
Alley Insider
Interesting comment on the whole issue of 'how to make $$ on social media':
Some good stats and numbers here but of course we are still VERY early with defining those new, 'gen2' revenue streams
for next-gen content driven models (and also - what IS commercial success in the future - how will it be measured??). Af-
ter all, less than 20% of the global population is online, and less than 2% have a broadband connection. Give it another 18
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months (only) and we could be at 3-4x that - and this will have a profound impact on content-centric business models.
Solid and fast connectivity is the # 1 factor here.
Posted by Gerd Leonhard on April 28, 2008: Broadband2.0 (via Wired) - and then: Content 2.0 and Copyright
2.0...? Wired has a good feature on what they call, of course - but hopefully with
some mocking intentions - Broadband 2.0. As I have said many times before,
we are just at the tip of the iceberg as far as SHARING of Content is concerned,
and we will need an altogether different logic of copyright and understanding of
'content' monetization to deal with this. I shall pontificate further on this, in the
future, but for now check out this short video.
Here are some high-lights from the WIRED feature, and my comments:
"Now two of the largest ISPs in the United States are hoping to kick off yet an-
other broadband renaissance, this time with home connections that promise to
reach 50-100 Mbps, enabling a slew of high-definition content, better-quality
video-sharing sites and even 3-D video. Call it Broadband 2.0. Experts say this
increased bandwidth -- when it becomes widely available -- will have a profound
effect on everything from our social interactions on the web to the way we con-
sume media."
My comment: High definition is certainly the key to a meaningful content con-
sumption (or shall I say 'content engagement') on the Net, in the long run. For-
got those lousy MP3 sounds and give me full CD quality - another 3-4 years and
we'll have that, as well, imho - and I just can't wait.
"Mr. Waters says that first and foremost, we can expect everything to go high-definition: We'll download HD movies from
Netflix, upload HD content to YouTube, and watch more sophisticated HD content on our televisions. The added band-
width may even spur development of extra goodies, like stereoscopic 3-D video and high-fidelity audio. Believe me, the
minute someone puts the pipes out there, people will find a way to use them," Waters says."
My comment: this is why Telecoms, ISPs and Wireless Operators must engage with Content NOW. It's time to leave the
good old idea of the 'stupid pipe' behind and move onto the Service + Content Pipe concept. This, to me, means a con-
certed push for new content licenses and flat rates. The Internet is the new Broad[Narrow]Casting Platform, and it needs
to be licensed accordingly. This is not at all an argument for ISP liability - rather, in my view, the liability for monetizing this
development rests with the Content Owners not with the Networks. Put up (i.e. license) or shut up - to speak frankly.
"If you put a 60 Mbps service out there, people are also going to want to have services associated with it. Yet no one is
going to create those services unless the 60 Mbps is there," Water says. That hesitation may not last long, because con-
sumers always find ways to use up whatever bandwidth is available -- and then some -- says Rudolf van der Berg, the
author of a recent study on the future of fiber networks (.pdf)."
Content is now Context and Conversation, too - and therefore, and in this new definition only, is King, once again.
Posted by Gerd Leonhard on April 23 The original David Bowie quote on "Music Like Water"
since you asked... this is where I (and Dave) got it!
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Posted by Gerd Leonhard on April 21, 2008 No One Likes The Music Labels - Who Cares - says Peter Kafka
Peter is a very sharp writer - read this one: "The number of UK consumers who said they trusted the industry fell from
47% in 2007 to 31% this year, with confidence disturbed by moves by the music industry to track down and punish illegal
music copying, and high-profile scandals in broadcasting....The bigger problem for the music business: There just may not
be that many music lovers. Recall that Radiohead, perhaps the world's best-loved tech-savvy band, offered to let their
fans pay whatever they'd like for their new album last fall -- and most chose not pay a penny. If that's at all indicative of
bigger trends -- and we think it is -- then the music industry's future is clear: A modest, niche business supported by a
handful of passionate consumers, and ignored by most others. And no PR agency will be able to fix that..."
Posted by Gerd Leonhard on April 21, 2008 : Copyright law should distinguish between commercial and cultural
uses (Cory Doctorow in the Guardian)
Cory Doctorow (one of my favorite writers - his recent book "Overclocked" is a must-read if you like science fiction that is
not-very-much-fiction-at-all) has a very good column in the UK Guardian, here. Cory is really good at nailing stuff down
that is otherwise left in more murky waters - here is a high-light:
"We need to stop shoe-horning cultural use into the little carve-outs in copyright, such as fair dealing and fair use. Instead
we need to establish a new copyright regime that reflects the age-old normative consensus about what's fair and what
isn't at the small-scale, hand-to-hand end of copying, display, performance and adaptation..."
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Cory also mentions the 'Access to
Knowledge (A2K) treaty' which
seems like a good thing to tune into.
Posted by Gerd Leonhard on April
14, 2008: New video: "Context is
King"; my response to a recent
Huffpost column - 'Is Content
Worthless', and why content may
yet have king2.0 ambitions)
I just read Jonathan Handel's column
entitled 'Is Content Worthless' with
great pleasure, and while I totally agree on his assessment that content has in and of itself - i.e. as a mere digital file copy
- become economically devalued, I believe that there is also some cause for renewed 'regal' aspirations in the future of
Content. If we expand the definition of content a bit and if we then include Context and Community as Content2.0 (so to
speak), the future may look somewhat brighter.
However, the bottom line remains: Content used to be 100% paid-for and now it's not. Now we must put Content in the
middle and make money around it... well, ok, watch the video!
I am using blip.tv in this case (since the video is 12 minutes which is too long for youtube); blip also allows the videos to
be downloaded via iTunes which I think is a great advantage. The feed link is here (just go to 'add feed'. Blip rocks!
Download the mp4 file 34.6 MB context_is_king.mp4
Posted by Gerd Leonhard on April 11, 2008: TV can avoid the music industry’s fate and survive the digital age (via
The Atlantic, Michael Hirschhorn)
The Atlantic has a good feature on the future of TV here. Some of it really rocks, some of it I would question. As usual,
here are some highlights and comments:
"My friend Mike and his wife had done away with their TV entirely and instead had set up their 20-inch iMac wide-screen
as the focal point of a kind of jerry-rigged home theater; with no grievous loss in quality, they were feeding it with content
from iTunes, various other Web-based media services, and DVDs. In doing so, they had dispensed with those hefty cable
bills and had asserted an icono-clastic form of control over their media lives...."
My comment: This is exactly what I am planning to do at my home - if this trend holds up it certainly changes the TV land-
scape ;)
In the future, TV will mean a cacophony of professional and amateur
short- and long-form content shipped via a variety of platforms to a
variety of devices, only one of which is the Sony BRAVIA taking up too
much space in your living room. Then, that content will be edited,
poked at, commented on, parodied, and rebroadcast by you the former
viewer—now “user”—to whomever you choose. Who gets paid by
whom to deliver what to whom in this new dispensation is, as in every
moment of grand tectonic digital shift, the $60 billion question...."
Well put!
"According to a recent study, the majority of Internet users watch
roughly 3 hours of video on the Web each month, compared to the
average person’s 4.5 hours of TV each day. For all the hype surround-
ing Web video, it was not surprising that NBC, responsible for 40 per-
cent of iTunes’s video sales, had earned only $15 million last year on
those sales..."
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My comment: good stats (but it's not the same outside of the U.S.!), so yes indeed, we are early - much like digital music 3
years ago. But now it's the only game in town. It takes longer but when it hits it's huge.
The next quote is very important since it addresses the differences be-
tween Music and TV:
"The traditional-TV model is altogether more user-friendly. It’s free, or at
least the costs are buried in cable bills (where, my Houston friends notwith-
standing, years of learned behavior dictate that this is simply a cost to be
borne), or they are buried in the more recent “triple play” offerings from
Comcast and other companies that bundle cable with phone and high-
speed Internet, obscuring the costs even more..."
My comment: this maybe a key point to the future of music - the costs must
be bundled more, obscured if you wish, made less painful... i.e. feels like free!
The next paragraphs is where I don't quite agree:
"In the past couple of years, the TV networks have thrown their shows onto the Web willy-nilly, some on their own sites,
some via AOL, Yahoo, and so forth, and some on new ventures like the aforementioned Hulu. The logic is that if they
don’t, someone else will; indeed, a dedicated surfer can find most any show through sub-rosa peer-to-peer file- sharing
systems that are used by an astonishing proportion of Web surfers, perhaps as much as 70 percent of the total. In the age
of distributed media, you give the people what they want when they want it, where they want it. “If they want their show to
succeed, they’ve got to get it out in front of as many people as possible,” an analyst for the technology research firm For-
rester said of the Big Four broadcast networks, articulating the moment’s conventional wisdom and following it with a typi-
cal note of alarm: “The window is very short.” But as the music industry learned very quickly (and the newspaper industry
before it), this model swiftly turns you from a business to a charity, undermining the value of your product even as it brings
your content to a larger audience. This is because advertisers and broadcasters have yet to settle on a protocol to sell
advertising to accompany the near-infinitude of available content, and consumers are not yet ready to spend a lot of
money paying for downloads. As NBCU’s Zucker put it in announcing the end of the network’s iTunes deal, “We don’t want
to replace the dollars we were making in the analog world with pennies on the digital side.”
My comment: This is a real valid concern, of course, but here is the bottom line: you may not like it but you don't have the
choice of withholding your content from the digital networks, and from those users that will convert, slice & dice, and up-
load them, as they see fit. Yes, in principle, you have copyright laws, you have enforcement tactics, you have leverage -
but will the insistence on Copyright Law and the long- standing tradition of Exclusive Control actually make you money in
the future? Will the old system i.e. the good many $$$ you made while ruling the analog world still be available? Will you
have the luxury of choice and prior approval? Will you be able to refuse the license? Refuse participation?
Well, I think the answer is clearly NO. While this may be upsetting it's not the end of the world -it's just the end of the
media-tollbooth system of the past; i.e. who pays who for what, and when. Spend your energies on setting up a new toll-
booth logic, and not on enforcing what worked in the past. Read my TV2.0 post.
Michael (the author), finishes it off with a nice twist, then:
"As TV and the Internet converge into something generically known as broadband, the distinctions between the two will
soon become nugatory from a consumer point of view. But will this resulting hybrid be more like TV, plus interactivity; or
more like the Internet, plus TV? The distinction will be worth billions to whoever gets there first and organizes this mess in
a fashion that’s satisfying for consumers. The networks and cable companies, therefore, will need to move quickly to find
a way to package the different streams—professional and user-made, broadcast and Internet—into a huge, interactive
library, all easily and pleasingly accessible on demand and portable to whatever device people are overpaying for at that
moment. When they do, they can call it Web 3.0, and everyone will want to get it...."
April 10, 2008 The Future of Music - as shown in Korea?
Very interesting feature at Portfolio.com Future Pop by Jeff Yang
Mar 27 2008: CDs are dead, and Korean impresario Jin-Young Park knows it. American music labels could learn a thing
or two from the model he's built in South Korea. Highlights "In meetings with music labels here, they talk to me about re-
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leasing albums," says Park. "They can't accept that there's no such thing anymore. Where I come from, CDs are noth-
ing—they're just souvenirs. I tell them, 'Wake up!'"
"In South Korea, where Park is building a new kind of music-business model, 80 percent of households have a broadband
connection; downloads via both PCs and cell phones make up an overwhelming share of the nation's music market.
Download revenue there has soared 422 percent since 2000, to $366 million, while CD sales have declined 83 percent
over the same period to just $70 million in 2007...."
Read this and say YES: "It's the artist as brand: In Korea,
consumers don't buy music; they buy a product relationship
that reaches across every media platform and entertainment
genre..."
"Fans of the group can buy tickets for their live concerts at
$110 a pop; purchase a growing array of their merchandise
(the names and faces of top K-pop stars adorn everything
from $5 phone cards to $500 cell phones and music play-
ers); download ringtones featuring their songs ($2); and even make bids on a charity auction for a dinner date with the
girls on the popular social-networking site CyWorld (five fans paid between $3,800 and $6,000 for the privilege last year).
And if all that's not enough, fans can always tune in to the Wonder Girls' reality TV series, now in its third season as one
of MTV Korea's top-rated programs..."
April 10, 2008 Kevin Kelly: The Technium - 1000 true fans is all you need
This is a must-read for all artists looking to build their audience: Kevin Kelly -- The Technium.
"Other than aim for a blockbuster hit, what can an artist do to escape the long tail? One solution is to find 1,000 True
Fans. While some artists have discovered this path without calling it that, I think it is worth trying to formalize. The gist of
1,000 True Fans can be stated simply: A creator, such as an artist, musician, photographer, craftsperson, performer, ani-
mator, designer, videomaker, or author - in other words, anyone producing works of art - needs to acquire only 1,000 True
Fans to make a living.
A True Fan is defined as someone who will purchase anything and everything you produce. They will drive 200 miles to
see you sing. They will buy the super deluxe re-issued hi-res box set of your stuff even though they have the low-res ver-
sion. They have a Google Alert set for your name. They bookmark the eBay page where your out-of-print editions show
up. They come to your openings. They have you sign their copies. They buy the t-shirt, and the mug, and the hat. They
can't wait till you issue your next work.
They are true fans...."
Great stuff.
Posted by Gerd Leonhard on April
10: Here is some food for thought:
How MySpace Music could beat
iTunes | The Industry Standard.
Quotes / Comments: "But MySpace
Music has a chance to beat iTunes.
And the secret to its potential victory
lies in the hands of the musicians that
the social network has supported since
MySpace's inception... The bottom line
is this: If MySpace provides bands with
the names and email addresses of all
the people who download their music
through MySpace Music, MySpace will
beat iTunes."
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My comment: the questions is WHO Myspace Music will empower: the musicians and the users (by connecting them), or
the major record labels that are now in bed with them. Both maybe a tough mission. "Providing fan data will also get MyS-
pace the support of more mainstream musicians who are also realizing the importance of owning the names -- and con-
tact information -- of their fans. Musicians like 50 Cent are starting their own social networking sites (his is called
Thisis50.com), because, as 50 Cent's new media director acknowledges, "The thing that separates This50 from MySpace
is we control the e-mail database. We can e-mail members if we want to."
My comment: good point but it's not
just email addresses. Really what we
are talking about here is Google Apps
for Musicians and Artists (and music
fans). THAT is what we need (and it's
being build in various places...;) - but
until there is major funding for this
kind of offering, and until the music
market is really 'flattened' i.e. open
and transparent we won't see it suc-
ceed.
Update: the author of this piece,
Melissa Chang, has some very perti-
nent additional comments here
Posted by Gerd Leonhard on April 08: Future Stories #1: Blogs will be Record Labels, and Bloggers will be the
new Music Moguls. BlogJs anyone?
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Within 2 years, the leading music blogs will become what used to be called 'Record Labels'. The people running them will
be those sharp, tuned-in, hyper-networked and resourceful BlogJs formerly known as bloggers. They will use their blogs
as the primary attention channel (yes - attention really is the new distribution) and will dish up a complete, interactive and
highly relevant multi-media experience that will include TV shows, chats, webcasts and games. Forget about 'websites'
and browsers - the BlogJs will do it on all platforms and devices.
The future brings 1000s of micro-music-channels that will literally broadcast - or rather, 'narrow-cast' their longtailing crea-
tions - be it text, audio, images or videos - to their hungry subscribers using MediaRSS feeds and customized my-stuff-
pages such as [fiction alert] imoogli, beatwibes amd muflakes that will 'live' on any connected device, e.g. your mobile,
your TV, your computer, your interactive bathroom screen, your wrist watch, your wimax-ing car radio, or your new P2P
global gaming network. Widgets will continue to become instant, ubiquitous mini-site modules that will allow anyone to re-
distribute any kind of content, to any device and any platform, anywhere. Most marketing will be done through and with
the users - and some of them will get paid for it, too.
BlogJs will attract an influential, engaged and proactive audience by flouting their charismatic personalities - indeed, these
disruptors, thought leaders and influencers will be our future broadcasters.
Like digital-age editions of 'analog' radio personalities such as the BBC’s
John Peel (rip), these BlogJs will lead the way in matters of coolness, style,
technology, gadgets, trends, politics, fashion and games, using new plat-
forms like [fiction alert] Muserati, Digggster, Musicious, Lovenotion, MyDace
and many others. And yes, many of them will be from China, India, Russia,
Brazil, Indonesia or Mozambique. Goodbye anglo-centric blogoshere...
Social Networks are the new Broadcasters
...and they will broadcast to (and from!) those always-on, always-within-reach and utterly personalized mobile devices fka
mobile phones, not just to or from computers. Blogs will amalgamate with, and integrate into social networks. Personal
publishing will evolve to include entire ‘me-casting’ toolboxes. My taste, my list, my ears, my audience, my artists, my net-
work i.e.... you guessed, it, my record label. Another 9-12 months and we will have the the first BlogJ signing the first hot
new artist to a agency-type agreement.
Music blogs will explode with the advent of the new music fat rate. Sites like [fiction alert] Quadrogum will rule, and blog
aggregators like UeberFeed will become the next Infiniti Radio. Widgets will become as common as email (which will fade
away). Hundreds of niche-obsessed BlogJs will emerge, becoming trusted opinion leaders that will draw 10s if not 100s of
1000s of networked music fans that will discover new music this way - strictly by lifestyle i.e. genre and sub-sub-sub-sub
genre. Much like it used to be in music-television; coolness and
credibility will rule here. (photo above from flickr.com/lynetter)
Those former MP3 pirates and stream-rippers are the new Clive
Davis’s and Ahmet Erteguns - they have the ears for the new artists
and a direct pipeline (read: feed) to perfectly matched audiences,
around the globe.
BlogJs will open clubs and spaces where their 'readers' can meet,
both in RL (Real Life) as well as virtually. Think [fiction alert] Hypda-
Bar. The [fiction alert] nipho9-5 (see box on left) will be their weapon
of choice, fully loaded with a 20 mega-pixel camera and HD Video
recorder, quadrophonic real-time sound remixer, 10+ ways of always-
on connectivity, 2.5 terrabyte of flash storage, and a build-in image
projector.
Once flat-rate music offerings become the standard...
- and they will, without a doubt (see more details here) i.e. by early 2009 - music-based blogging will be unleashed in a
major way and stands to become very powerful very quickly - everyone is going to want a piece of that hot new BlogJ.
This is when we will see blogs become record labels and music publishers (albeit with an altogether different operating
paradigm), filling the gaping void that has been left by the dinosauric and hopelessly control-obsessed major labels, those
large indie label chiefs that still hope to become major label bosses themselves before the money dries up, short-sighted
and technologically hyper-challenged managers, and eerily self-outmoding public broadcasters.
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In less than 2 years from now, ubiquitous and fully legal yet 'feels like free' music offerings will bring us music bloggers
that will become bigger than the biggest radio DJs we’ve ever had. And just like a lot of successful radio personalities be-
fore them they will move on to become A&R people and label owners, too. The
difference is, of course, that they will have powerful, direct, zero - friction dis-
tribution channels at their disposal, and a loyal global audience, built-in and
ready to go. All they have to do is keep on earning and retaining the attention
of their users.
Look for those new BlogJ’s to attract highly-targeted and 'loaded' advertisers,
steered by forward-looking major-brand CMOs and next-generation creative
agencies such as TribalDDB or Droga5. These ads will pay as much as $5 per
click-thru (CPT), with major brands ‘sponsoring’ music blogs that fit their exact
brand vision.
Once the bizarrely overdue and tired issue of 'how to legally provide streams and downloads of any song I choose' is
solved, so that a BlogJ can finally use music just like a radio station uses music (i.e. powered by a collective voluntary
blanket license), music blogs will explode and quickly increase their reach beyond the current blogosphere inhabitants
and netizens, beyond the computer, and most importantly beyond the web browser.
Imagine a blog that streams a personalized radio channel via a mobile application that sits within your favorite social net-
work - this is the next radio! Whether or rather how you will get to keep the music will not be relevant any longer - what
matters is the selection, the endorsement, the context, the relevance. No longer are we going to be hungry for just any
music provided that it's free, now we are hungry for relevance. So, here is some advise for the last few incumbent record
labels of today:
Dive into music blogging, NOW - either start your own or engage with existing ones...
Build a global network of bloggers that you can 'feed' with your music. Engage, talk, learn...
Get ready to invest time & money in the top blogs
Look at bloggers as your next A&R people
Soon, a music-RSS feed from the leading goa-pop guru can be just as valuable as those hip shows programmed by Nick
Harcourt at KCRW or by Stephen Hill at Hearts of Space (and theirs will be even more renowned).
Once broadcasting is legally and officially delivering music and the myriad of bizarre licensing problems fall by the way-
side, bloggers will quickly morph into record labels. Artists will 'sign' with them to get their official approval which will mean
instant notoriety in your target audience.
Blogs are...Labels.
When: 18 months
Where: everywhere (but EU, Asia and BRIC countries first because there are much less legal issues around so-called
mechanical copies)
Impact level (from 1-10): 4
Opportunity rating (from 1-10): 9
Posted by Gerd Leonhard on March 28: Will Richardson: Why the Read/Write Web Changes Everything Shifting
Notion of What it Means to Teach
Great resource: willrichardson Wiki. "The illiterate of the 21st Century will not be those who cannot read and write, but
those who cannot learn, unlearn, and relearn." -- Alvin Toffler
Excerpt:
Challenging Times for Educators:
Our students are leading us.
Participating more
Collaborating more
Creating more
71% of students with online access use social networking tools on a weekly basis ( NSBA )
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75% of college students have a Facebook site
The use of social software by educators is significantly less.
What’s next…?
????
Posted by Gerd Leonhard on March 28 Warner Music Group hires Jim Griffin (via Portfolio.com) *** Music Like
Water is getting real?
'"WMG has tapped industry veteran Jim Griffin to spearhead a controversial plan to bundle a monthly fee into consumers'
internet-service bills for unlimited access to music. The plan—the boldest move yet to keep the wounded entertainment
industry giants afloat—is simple: Consumers will pay a monthly fee, bundled into an internet-service bill in exchange for
unfettered access to a database of all known music..."
Comment: the plan is not so about keeping wounded giants afloat - it's to build a new garden for them and for everyone
else to play in - if they can play without owning the house.
Jim Griffin says: "But we're swinging toward the vine of music as a service. We need to get ready to let go and grab the
next vine, which is a pool of money and a fair way to split it up, rather than controlling the quantity and destiny of sound
recordings."....Griffin says those fees could create a pool as large as $20 billion annually to pay artists and copyright hold-
ers. Eventually, advertising could subsidize the entire system, so that users who don't want to receive ads could pay the
fee, and those who don't mind advertising wouldn't pay a dime..."
Here we go with Music Like Water! A pool of
money and a fair way to split it up.
"Jim will vehemently deny the 'tax' label," says
Akamai's Barrett. "But it's a tax nonetheless. It'll
be a government-approved cartel that collects
money from virtually everyone—often without
their knowledge—and failure to pay their tax will
ultimately result in people with guns coming to
your door.."
My comment: What is the argument here? Are
ASCAP, BMI, SESAC and the other PROs /
MROs also just cartels that extort money for
something you don't want? Or are they important
(if sometimes clumsy) instruments of a voluntary
blanket license that enable the 'fair use of music with fair remuneration'? If you call this a tax then I don't know what
would not be a tax.
My quote (as printed in this feature):
"Gerd Leonhard, a respected music-industry consultant who has advised Sony/BMG, which recently announced plans for
a flat-rate-subscription model for digital music, rejects Barrett's argument that the monthly fee amounts to a tax. "This is
not a tax," says Leonhard. "It's bundled into another charge."
"People should not be too harsh on Jim for trying to get the ball rolling," says Leonhard. "At this point, 96 percent of the
population is guilty of some sort of infringement, whether they're streaming or downloading or sharing. "What we have
here is the widespread use of technology that declares all of the population to be illegal."
Clarification on my part: I consulted Ged Doherty at SonyBMG UK (i.e. not the US company). My final comment... below.
The Music is in the Network and the MONEY IS IN THE NETWORK.
Update:
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Techcrunch comments (Michael Arrington applies his usual shutgun approach to the issue - I think he's severely chal-
lenged with issues that take longer than making a frappucino at Starbucks) Ars Technica says: "Griffin's musings may not
amount to much of anything, but the fact that Warner and Griffin are floating trial balloons is another indication that the
record industry has begun thinking outside the small box it has inhabited for so long...."
Techdirt responds with the quite unoriginal and in-informed 'this is a tax' rant.
Posted by Gerd Leonhard on March 2 The Royalty Scam - New York Times (Billy Bragg on the Bebo AOL deal)
Billy: you are right of course; music should be paid for and the creators should always receive a piece of the take in all of
these deals. But here is the real question: how come your representatives (i.e. the labels, publishers, rights organizations
etc) have not yet offered a simple and realistic blanket license for the use of your music in these 1000s of social net-
works? A license like Radio has?
IF they had done this a few years ago, you WOULD HAVE receive a piece of this cash
and you WOULD be participating in all these deals. The fault is not with Bebo but with
the music industry, for not making those licenses available - at least not until there is
huge pockets to go after (such as myspace > News Corp, Youtube > Google, Last.fm >
CBS). Is it laziness, cluelessness, ignorance, incompetence... or lack of leadership? You
tell me.
So far, the industry has waited until some startup gets big enough only to then, retroac-
tively, take them serious and negotiate appropriate license fees. It is the fault of your
representatives, Billy, that you have not received your share, not Bebo's or Myspace's -
tell these guys to get off their behinds and start blanket licensing NOW. Don't complain
about Bebo - the liability is with the music industry. In-action is what is hurting the creators.
Says Billy:
"The musicians who posted their work on Bebo.com are no different from investors in a start-up enterprise. Their invest-
ment is the content provided for free while the site has no liquid assets. Now that the business has reaped huge benefits,
surely they deserve a dividend.
What's at stake here is more than just the morality of the market. The huge social networking sites that seek to use music
as free content are as much to blame for the malaise currently affecting the industry as the music lover who downloads
songs for free. Both the corporations and the kids, it seems, want the use of our music without having to pay for it.
The claim that sites such as MySpace and Bebo are doing us a favor by promoting our work is disingenuous. Radio sta-
tions also promote our work, but they pay us a royalty that recognizes our contribution to their business. Why should that
not apply to the Internet, too?"
Posted by Gerd Leonhard on March 23 Why is Universal Music cozying up to Apple? | via CNET (flat rate for
ipods?)
This is a good comment on the Apple flat rate for music that has been in the news lately: "The FT reported that Morris
wants $80 for any Apple device bundling Universal Music songs, while Apple has offered $20. Getting a share of music
players is smart, said Forrester Research analyst James McQuivey, even if it is late. But he warns that whatever gains the
labels make on device sales, they could lose in other areas. Allowing Jobs to place their music catalogs on a single device
might allow him to offer a breakaway handheld that could overshadow any other gadget or music service out there...."
My comment: I don't think so. People that buy CDs now ALREADY buy them voluntarily and because they really want a
physical product. Cannibalization would be minimal and would definitely be offset by the revenues from the devices (pro-
vided the offer is indeed irresistible). However, the bigger question is: is the money in the DEVICE, or is it in the NET-
WORK, or both? My take is that it's the network, and not the device. But let's see...
"The labels would just be turning over their music to another Apple-only environment," Forrester Research analyst James
McQuivey said. "Nobody would want anything else."
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My comment: I don't agree. Other providers would just need to be better or different on some other way, or add other val-
ues. You'll just have to be better or different than iTunes.
"This kind of offer would kill CD sales far more quickly," McQuivey said. "You'd be giving people that typically buy music a
reason to quit buying. Besides killing off CD sales, the music industry would harm two areas that are going strong for it
right now. One is MP3 sales and the other is the (free streaming) music offered by social networks Imeem and Last.fm. If I
were the music labels, I would tell Apple to come back in 2009, after I've given these other services opportunity to grow."
My comment: There is not just ONE kind of music user / buyer / fan. There are dozens, and there is ample opportunity to
serve them all, with different models, at different locations, at different times
March 21, 08: Breaking the Law To Get a Break (via Washingtonpost.com) - Sonific's challenge of making it work
with 'legal' HIT content "
For many other start-ups, it's a tough trade-off to become legitimate. Like Imeem, Sonific, an online service that allows
users to stream music to blogs or personal Web pages, is trying to strike licensing deals with large record labels to ex-
pand its music library, which now has about 250,000 tracks from smaller,
independent labels. But Gerd Leonhard, the site's founder, said it cannot
get the interest of labels because of its relatively small pool of 100,000
users. "Our major hurdle is that we're trying to do it legally," he said.
"You're either forced to use the music without the proper permission or you
just don't get your audience."
Nice to see that that Kim Hart (the Post writer) got this right. I have written about this a few times before: right now law-
abiding startups like Sonific are essentially penalized and severely handicapped by the lack of clear licensing procedures
and the major labels' outmoded business strategies.
Here are some more thoughts on this: While there are countless startups providing any and all music catalogs under
some 'fig-leaf' licenses or without any permission whatsoever (whether using streaming widgets or other means... nope,
sorry, no names here;) the major record labels still manage to choke any intention to license their catalogs by demanding
exceedingly large cash advances, insisting on fixed per-stream payments, asking for ‘free’ company equity to get deals
done, and on top of it all want to impose bizarre usage restrictions. Mission impossible.
Clearly, they seem to prefer this turf to remain unlicensed rather than to allow workable market-based solutions to
emerge. This behavior is killing a very powerful newly emerging ecosystem because one cannot operate a music-based
service with just the 'longtail' content - a dog without a head simply does not walk, yet.
A startup such as Sonific that wants to provide interactive streaming 'music widget'
services - and that will clearly need a large audience to be relevant - must either a)
live with being constantly criticized by the users for the lack of hit content, and there-
fore not attain a sufficient audience b) proceed to use music without the required li-
censes, and therefore be at the total mercy of the record labels at some point in time,
i.e. when they feel like dropping the ‘copyright infringement’ hammer c) build a huge
audience very quickly, based on having all content available - permission or not -, and
then quickly sell themselves to a large company that will take care of placating the
labels while the money is plenty and the pockets are deep.
I don't know about you, out there, but none of these choices sound good to me.
Almost a billion people now use music to stream on their blogs, social network pages, home-pages and user profiles – this
is indeed a veritable gold mine for music marketing. Yet, the established players in the music industry are still looking to
simply squeeze 'permission fees' from companies that want to serve this market, instead of building a new market
together.
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Posted by Gerd Leonhard on March 20 The End of Control: Mobile Media
Un-Control in Your Pocket!
Remember when, a decade ago, being online meant sitting at a large, loud, and ugly machine that was tethered to a wire
that got you the digital juice? Now return to today, where the Net lives in our pockets, inside silent, slick, always-on de-
vices that are getting cheaper by the minute, propelled by bandwidth and storage costs that are plunging as well. What a
difference this is making to how we consume media! Zoom forward another ten years and you’ll see Control of Media
faded in the rearview mirror, a tiny blip thousands of miles behind you.
You will also see Anglo-American media dominance fade: Recent Infonetics statistics show that worldwide, 47% of mobile
subscribers come from the Asia-Pacific region; 36% come from Europe, Africa, and the Middle East; and a mere 9% come
from North America. Geographical differences, electrical power issues, and a lack of wired infrastructure mean that many
people will see their first webpage on a mobile device, not on a computer.
So, first, two clarifications:
1. A mobile phone is a computer is a media device is a copy machine is a radio is a broadcast tower — here, today, now.
This mind-jarring convergence of devices and previously separate realms of technology is already upon us, and will be
even more pronounced in the future. And yes, there will be no single user interface, no single type (or brand) of device
that will dominate, like the good old transistor radio did. Instead, people of different ages, in different cultures, and in
different locations will buy many different types of devices, some bundled with content, some not. Fifteen-year old kids
in America may buy slick devices that are interconnected but mostly not used as telephones, 22-year-olds in Asia will
want online chat rooms, virtual worlds, and VoIP-calling fully integrated. But either way, this is certain: the days of the
single-purpose, stand-alone (i.e., disconnected) media player are over, and so is any chance to control what content
can be stored in it. Technology has already led the quest for total control into absurdity; now we have to be smarter to
generate some trust-based “control”
(what I have come to think of as
Trustol in this new system.
“The handset will be the world’s Internet
platform, and it will be open.” —GigaOm
2. There is no such thing as the “mobile
Web” — no special place to go if you’re
on your mobile, no special technology
to use, no plug-in to install, no special
way of accessing the Net. There are, of
course, vast differences in design and
user interfaces (driven by size, power
restraints, and display types), as well as
wide-reaching differences in user be-
havior. And therefore, different kinds of
content will be successful in different
contexts. But when we talk about mo-
bile media, we can no longer assume
some sort of separate realm that is cor-
doned off the overall Net. Therefore, any hopes that mobile media will not go where the Web has already gone — albeit in
a mostly tethered, desktopped, crude kind of way — are not realistic. Moreover, any hope of “protecting content” (a pitiful
euphemism for setting up hurdles to somehow wrest unavoidable payments from the users) now seem quite far-fetched.
Far better just to make the content available and meter its use.
A Third Dimension in Change: Time, Place & Location Shift
Mobility is now the major driver in media, and this trend will become even stronger. First the People Formerly Known as
Consumers got used to time-shifting (via cassette recorders, TiVo, VCRs, and DVRs), then they came to like place-shifting
(witness Slingbox, Avvenue, SongBirdNest, et. al.), and now they can get it all, anywhere, anytime, even while moving
around — and for what feels like free!
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Media companies used to be able to control not just what and when we consumed, but also where: whether in front of the
TV (i.e., the living room), in the car (as with terrestrial radio), or, more recently and in a already much lesser way, in front
of that clunky, tethered desktop computer. In the future, most of these tried-and-tested means of control are toast: People
will consume their media when they want, how they want, and where they want — and chances are it will be while they
are on the move, with the only real distinguishing factor remaining their customized user interface, their personal media
canvas.
Now put yourselves in the shoes of a major media company, and you’ll get a glimpse of the annoying headaches this im-
manent change is sure to produce. Just tell yourself, “Most of my users — the people formerly known as consumers —
will start using mobile devices for their basic content needs within the next five years, and the harder I make it for them to
get my content, the less I will matter to them.” Loss of mattering equals loss of audience equals loss of revenues. Are you
with me so far?
Got Trustol?
Just like every phone now also has a camera (and if not, it is by design, not by omission), every mobile device and every
phone will soon be constantly connected to the Internet as well, and we will come to think of them as those little boxes
that can do pretty much the same things as our good old desktop computers. The only difference will be the interface, of
course — and that is where some elements of what I have come to call Trustol (i.e., some element of user control based
on trust) comes back in.
Creators and their representatives (managers, media companies, and rights organizations) must therefore act urgently on
the basic fact that all media is rapidly moving to mobile devices rather than being confined to computers or traditional me-
dia boxes such as TV and radio. If you thought it was hard to control what people do with your content on the computer,
you should think again: Mobile devices will make this look like a walk in the park, with media-sharing via those “boxes
formerly known as computers” representing only the tip of that 1,000-foot iceberg.
The Default Media 2.0 Box is the Mobile
While only ten years ago mobile devices meant cell phones, PDAs, or MP3 players, today mobile devices are full-fledged
computers. In many newly developing countries, in fact, many users will never even buy one of those Media 1.0 boxes.
They will use mobile devices to listen
to music, access the Web, connect to
favorite social networks, watch TV
shows and movies, and connect with
each other at the same time. The
previously disconnected media-
playing device has now become part
of the connected ecosystem — see
the iPod Touch or Nokia N95. Soon, it
will be hard to tell whether a device
makes phone calls via the cellular
network or via the Internet, connected
through Wi-Fi or WiMAX. In fact, the
very definition of “phone call” will
likely be rewritten, since it’s not
longer a phone making a call but just
a mobile computer calling another
mobile computer, “phone” UI or not.
Mobile Control-Stoppers
Let’s consider the crucial characteristics of mobile devices and why they are control-stoppers in the purest form:
1.
They connect to high-speed data networks and the Internet.
2.
They connect to the devices of other users, whether nearby or virtually local.
3.
They offer instant communication and sharing with other users (as well as other computers).
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4.
They can do something on the go that used to require a fixed location, i.e., bookmark a song, image, or text; ex-
change tags or feeds; scan a bar-code; record and distribute a video; listen to digital radio; record and distribute
audio, etc.
It is these endless combinations and possibilities that make mobile devices so powerful and habit-forming (and thereby
impossible to control): All of a sudden we can read our customized, always-updated newsfeeds anywhere, anytime (in-
cluding offline); we can identify songs we like, bookmark them and download them when near a broadband; we can pull
up maps of favorite locations and send them to anyone on our buddy list; we can shoot a video and send it to our friends
or upload it to a media portal; we can remix a ringtone and Bluetooth it to anyone in range.
Mobility is blowing the top off the house of cards that was “controlled media”; it’s the final nail in the coffin of DRM, TPM
and whatever other M’s were cooked up in those disconnected ivory towers. With a click on the button, we are now con-
necting via the cellular networks, via Bluetooth, via cable, via WiMAX, via HD and DAB chips...and that’s only the begin-
ning. With the price of some high-end mobile devices already surpassing cheap laptops and desktop computers, it is not
surprising that mobile device capabilities are exceeding computers now as well, with the next big frontiers being fuel cells
and new display technologies.
Now, it’s no longer the mere access we long for, it’s to have someone solve the Paradox of Choice for us: too much, too
quick, too-many-options media content will pose much more significant challenges than getting access ever did. (I’ll ad-
dress this opportunity in my upcoming chapter on the Paradox of Choice.)
Digital Natives: Hyper-Powered by Mobile Media Devices
Just imagine these powerful mobile devices in the hands of those pesky digital natives, the download generation, the
echo-boomers: Five hundred gigabytes of media at their instant disposal as they roam public places, eat in a restaurant,
or sit in a subway car. Instant connections made with buddies and new friends, on the spur of the moment. Music passed
around like personal greeting cards, music being remixed by several users simultaneously, and then uploaded to their fa-
vorite social networks. On-demand streams of music and video, provided by more than a billion people who mingle on
thousands of social networks.
New mobile media applications will be developed that will make Shawn Fanning’s original Napster look like a Model-T
Ford, with installs of hundreds of millions for the hottest apps not unthinkable.
This is, naturally, manna from heaven for the hardware manufacturers, the companies that make these devices formerly
called phones: people who want to connect, communicate, share, listen, and watch — while on the move — everywhere
on the planet. And once the already omnipresent digital content actually is blessed with legality, in the form of blanket li-
censes and flat rates, it will be a boon for the telcos, too. (I discuss this in my
upcoming chapter “Telco 2.0: More Dollars with Less Control.”)
If we can say one thing for certain it is that any restriction that could possibly
reduce the users’ power will be avoided like the plague. Competition will be
fierce, and with sales in the hundreds of millions of units, the profit potential is
significant and any impediment to fast user adoption would be suicide. In other
words, no mobile device or handset manufacturer, or operator, will risk alienating
their users with content-protection related malware or other software hurdles;
rather, the enormous potential of mobile media will further accelerate the adop-
tion of flat-rated content and connectivity models — starting with music. (See
Chapter 4.)
Media Is the Mobile Lubricant
Now and in the future, media content is that crucial lubricant that drives the ever-
increasing use and ever-faster adoption of new devices (and their related serv-
ices); it’s the oil in the engine of communications, and the higher the performance of the device, the better the oil must be.
Looking at the first few groundbreaking devices that fit the “mobile computer” category, such as the Apple iPhone, Nokia
N95, and Samsung F330, it is already quite apparent where this is going: more powerful means of media consumption
and communication (which means more sharing, all the time), lesser restrictions designed to spur large-scale user adop-
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tion, and a seriously increasing pace of device convergence. Get ready to make Skype calls on your PSP, watch live tele-
vision on your iPhone, listen to KCRW or Danish Radio or the BBC on your Oakley MP3 sunglasses, and receive RSS
feeds on your wristwatch.
While Apple may, for now, try to cling to a tight control over what new iPhone and iPod applications can be developed and
offered, I would already consider it a key “EoC Moment” when Apple concedes that it must actually open the iPhone plat-
form to outside developments and make an SDK available. I predict that in the long run even their control concerns will
fade. If indeed they want to become a truly dominant player in this turf and not just a cool, exclusive brand for individual-
ists, they will have no choice but to open up their nicely walled gardens.
Watch for Apple to compete directly with Nokia, Samsung, LG, and Motorola for dominance in mobile entertainment and
communication devices — and my bet would be on Nokia since it has the most longterm view of what it wants to do, the
most balanced culture-vs.-business mindset, and the sheer tenacity that will be required to address a myriad of issues.
But then again, there is Google....
Caveat Emptor: Will Mobile Media Promote a Blip Culture?
Clearly, mobile media will be subject to even more competition for attention than media consumed on those big boxes in
our living rooms. While you scan the news feeds on your mobile device, a new text message may arrive, a Bluetooth-
powered friend may want to connect, or some location-based service may make itself known — and all this while your
customized Internet radio station is playing and your emails are coming in. The user’s attention will be seriously con-
tested, and that may change the way that people package the content they send.
Whether this is for the better or the worse remains to be seen. But a real concern is that due to the level of “attention
competition,” any content that is too deep, too ambitious, or simply too long would fall by the wayside — and that would
severely dilute the quality of media offerings.
In the meantime: Be mobile, be liquid — or be gone.
Posted by Gerd Leonhard on March 14 Cordweekly.com - The future of music (CMW 2008 coverage)
A comment on my keynote at Canadian Music Week 2008: Cordweekly.com - The future of music. "At the “Digital Music &
Media Futures: New Business Models” demonstration, music futurist, author and CEO of Sonific LLC, Gerd Leonhard dis-
cussed the problems facing the music industry and the ways in which they can be turned into opportunities instead. Stat-
ing that the major record labels have forever lost the “control” that they once held over the means of distribution, Leonhard
argued that it is time for the industry to embrace the changes that are occurring.
“What we see right now is basically wasted enormous potential,” Leonhard said during his keynote address. Rather than
turning to distribution models like iTunes, which essentially attempt to transfer the old model of selling tracks or albums to
a digital world, Leonhard advocates an entirely different business model. Under Leonhard’s model, publishing and distri-
bution agreements will be re-written in order to allow music fans and consumers to access music without having to pay for
each song or album.
Under this approach, music will be used as a form of content, which is licensed to various websites,
who will in turn use advertising money to pay for the licensing fees.
“Consumers will pay with attention,” said Leonhard, as he argued that advertising will offset the costs
associated with producing and distributing music. However, in order for a networked approach to selling
music to work this will take “collaboration and agreements to get the music out there,” said Leonhard.
While these approaches have yet to reach the mainstream, they are already being developed and are
set to launch...."
Posted by Gerd Leonhard on February 28 Dropping Off The Beat (Forbes.com reports from the Digital Music Fo-
rum)
Louis Hau at Forbes has a good review of what transpired at the Digital Music Forum in NYC on Feb 26 / 27: Dropping Off
The Beat - Forbes.com. "While piracy is a serious challenge for the industry, the major labels have been so focused on
combating it that they are stifling the emergence of new business models, argued Gerd Leonhard, a media consultant and
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chief executive of music Web site Sonific. "If you want to innovate in the music
business today ... either you are illegal, in a gray zone or you don’t do it because
you don’t get to do what you have to do to please the user," Leonhard said Thurs-
day. "Everything that’s cool is forbidden," he added, arguing, for instance, that the
major labels oppose services that allow users to share music without permission,
even though doing so could potentially expand the audience for the music. "It’s not
that we're against sharing, we just want to get paid," countered Syd Schwartz,
senior vice president for digital strategy at EMI’s Capitol Music Group."
Posted by Gerd Leonhard on February 21, 2008 BBC NEWS 'Chaos' of China's music industry: Agi says music is
just a "tool to sell things" in China
Agi says music is just a "tool to sell things" in China <<<< High-lights: "Whereas the US and Europe are still finding ways
to counter piracy, Chinese record companies have already decided it is a lost cause, finding other ways to make money
which are not directly related to music sales..." "They also find it expensive to market themselves. Huang Feng, who used
to work for Warner Music China, says artists have to turn to big brands, such as Apple, Nokia and Levi's. The big firms get
popular bands to promote their products, and the bands also benefit. "If they choose you, you can use their money to
promote your own image to market your songs," says Huang. A model for China only? And India? And Brasil? BRIC?
Posted by Gerd Leonhard on February 18, 2008 Forrester Report: Digital Music Download Sales to Pass CD Sales
by 2012 but CD Sales drop dead (Digital Media Wire)
Nice to hear this stuff from Forrester: "Despite the rise, digital will still not compensate for falling CD sales, which will drop
off to just $3.8 billion in 2012. "This is the end of the music industry as we know it," said Forrester principal analyst
James L. McQuivey...."
"The firm also noted that "experiments in ad-supported downloads will be silenced by the powerful combination of DRM-
free music and on-demand music streaming on sites like imeem.com."
“The industry has to redefine what its
product is,” said McQuivey. “Music
executives have spent years tracking
CD sales. But the artist is the product
- not just the source of it. New forms
of revenue will come from unex-
pected sources. For example, the
industry has failed to capitalize on the
growing popularity of video games
such as Guitar Hero and Rock Band.
In a market where musicians are
happy to sell a million copies of a CD,
a video game market where titles
can sell five million copies is enough
to motivate even the most depressed
music executive.”
Indeed but I don't agree on the im-
pact of these trends on ad-supported
music models: after all, the likes of
last.fm and imeem (and soon, mys-
pace, and many others) will depend
very heavily on ad supported revenue
streams. The Future of Music is in
ACCESS, first, and only then in
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PRODUCTS. Metered, flat-rated access, with 100s of upstream-selling options on top. And with ads2.0 creating new
pools of money. See this marvelous illustration, below...
Among the drivers of Forrester’s five-year forecast for music sales:
* MP3 player adoption. The average MP3 player is only 57 percent full, suggesting that the devices are underutilized,
while more of the devices are being bought by households with more than one MP3 player. Moving forward, a majority of
MP3 players will be sold to households that already have one.
* DRM-free music. With the four big music labels now committed to eliminating digital rights management (DRM), DRM-
free music will extend beyond pioneer Amazon.com to Apple iTunes and the other major online music sites.
* Social networks. DRM-free music enables every profile page on MySpace.com or Facebook to immediately become a
music store where friends sell friends their favorite tracks.
February 13, 2008 Welcome to Paul McGuinness’ next version of the Internet: policed, censored, throttled and
fully under his control (a comment on Paul's speech at MIDEM 2008)
Update: you may also want to read my guest-blog post at Last100: Gerd Leonhard: Flat Rate or Flat Line - further
thoughts on the Music Flat Rate.
Here, finally, is my rather long-winded response to Paul McGuinness’ MIDEM 2008 speech. On January 29, 2008, I sat in
an auditorium at the MIDEM conference in Cannes / France, listening to U2’s manager, Paul McGuinness. Paul delivered
a chilling speech that, hands-down, accounts for one of the worst moments in my 10+ years at MIDEM (and yes, there
were a few others).
I was very seriously challenged to listen to Paul’s entire spiel without jumping up and telling him how much he is barking
up the wrong tree, and how much damage he is doing with this performance. But the worst part was yet to come: after
Paul's speech a panel of managers ensued that that – apart from a good friend, the ever-sparkling Peter Jenner - was so
obviously fanning Paul that I simply had to leave the auditorium in a hurry.
Paul’s speech single-handedly ruined my day, overshadowed an otherwise quite interesting MIDEM and left me with a
sinking feeling about the Future of the Music Industry, a topic that I have occasionally addressed in the past;).
Imagine one of the most progressive musicians (Bono), one of the most amazing bands ever (U2), represented by a man
that sounded like he has been out snow-camping in Greenland with his buddies from the IFPI, BPI, RIAA and UMG for the
past 5 years. Ouch.
So, here are few comments on some of the hand grenades that Paul threw into the audience during this occasion.
To quote Paul: “And as it turned out, the "Safe Harbour" concept [that governs the ISPs’ liability] was really a Thieves'
Charter. The legal precedent that device-makers and pipe and network owners should not be held accountable for any
criminal activity enabled by their devices and services has been enormously damaging to content owners and developing
artists…”
Let me ask you this, Paul: do you really advocate web sites, communities and networks scanned and censored, emails
read and screened, Instant Messenger conversations monitored, Skype calls supervised, USB sticks DRM’ed, hard-drives
sealed, flash memory cards locked, rootkits and software locks on our computers, a read-only web, the end of remixes,
and the implementation of an online police state that without a doubt will only bring us new censorship and the demise of
fair use and free speech while the un-paid and unlicensed trading of music will soar to new heights in 100s of new ways
that we don’t even know about today?
If, according to the gospel of McGuinness, this should be done with music, how about films? TV? Cartoons? Logos? Im-
ages? Texts? Books? Magazines? Who decides what’s okay to use and what not? You? U2? AllofU? Your new company
maybe? Your buddies at UMG? Or someone you assign and control?
Any hope that I may have had about the managers - along with the artists they (I thought) represent, and maybe along
with the writers and composers - forcing some real change on the music industry right now were obliterated by Paul’s rant
which most of time sounded like it was remotely scripted by RIAA, IFPI, BPI or UMG. Lobbying talk in its most classic
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form. Any hope that I had for the ISPs and telecoms even wanting to discuss the possibility of a blanket license for the
'feels like free' use of music on their networks was slashed by Paul's incredibly misguided and counterproductive speech.
Says ueber-enforcer Paul: “A simple "three strikes and you are out - enforcement process will see all serial illegal up-
loaders who resist the law face a stark choice: change or lose your ISP subscription…”
Paul, with all due respect, this is bizarre. How about a simple ‘one license and you’re IN’ proposal by the industry, led by
people who know what's real and what's not, something that would actually turn all those alleged micro-criminals into en-
gaged and bankable consumers, market participants, revenue generators? I can’t fathom why you still don’t you get it –
these people LOVE MUSIC. Your artists. Your bands. All you need to do is MAKE IT AVAILABLE without asking for the
moon, and without treating them like thieves. This kind of attitude will sink the ship, Paul – and not just yours.
McGuinness’ incessant calls for tougher laws, more enforcement, more internet
police, more CONTROL, more special forces that hunt down every possible un-
sanctioned use of content on the Internet are surfacing though-out this speech,
making the MPAA's Jack Valenti's (rip) famous quote on VCR users = criminals
sound like a socialist mantra. The death penalty for refusing to buy CDs, anyone?
Jail for refusal to love DRM? Digital isolation for employing the web for unregulated
uses?
Another juicy quote from his speech: “President Sarkozy's plan, the Olivennes ini-
tiative, by which ISPs will start disconnecting repeat infringers later this year, set a
brilliant precedent which other governments should follow…”
Paul, with all due respect (again), this is an utterly ridiculous concept, and this kind of web-police idea will never fly (and
what’s worse, I think you know it!). Even if it were technically feasible to ‘filter’ (as you call it) all so-called unlicensed mu-
sic from all the networks, everywhere, where would we end up? Digital networks utterly devoid of music because it hasn’t
yet been made available by the same people who don’t yet know what IM, RSS, social networks widgets are, or full of ‘se-
cure’ music that is licensed on terms that are an insult both to the users and the companies that serve them - just like
we’ve had, until now: loaded up with copy protection and bizarre usage restrictions, and nothing but hurdles for the con-
sumers.
Or maybe you'd like a world where only a privileged few can legally provide music, where distribution is safely back ‘under
control’ and 4 or 5 companies run the show? Well, I guess, as long as you are working nicely with one of them it won’t
matter, will it? Just in case you haven’t noticed it, Paul, you seem to be advocating some kind of Police State here, a re-
gime, a cartel – somehow it’s hard to believe that you can represent Bono with a view of the world like this. And why do
you want tougher laws and a ubiquitous web police? Apparently because you are still, after all these years, unwilling to
change the way you have been doing business for 31 years, i.e. under your control, your way or the highway, pay to play.
Power. Control. Enforcement. Is that it?
Among the many things that you just don’t seem to get (or that remain cleverly hidden?), Paul, is that the very system you
are so used to, that holy operating paradigm of Total Control, is broken at the core, and that more policing, more stringent
laws, more criminalization and more attempts at putting CONTROL back into the system, will not make it well again -
these attempts at reviving the comatose paradigm are doomed for failure. And the worst part, Paul, is that your artists al-
ready know this, I bet.
Again: a true, new, voluntary collective license (i.e. legal framework for national Music Flat Rates) would mean that every-
body can legally use music and that everybody pays, somewhere (either with real cash or with attention) - but without the
pain of constant needling for a $ per song, without the granularity, and yes, without all that control you seem to be so fond
of. Music that is as 'freely' (but NOT for free!) available and as omni-present as water or electricity, with everyone paying
and everyone using, and with ubiquitous coverage, accessed via a large number of entry-points (Net, Cable, Wireless,
Satellite...), using many different devices, and in many different shapes and incarnations.
It is a fair and equitable system where all users, and / or their service providers (who you seem to hate so much for not
wanting to pay you), happily and automatically make small, 'feels-like free' payments to be able to access a large pool of
music, without restraints, all-you-can-eat, anytime, anywhere. A system where the works of any creator and rights holder
can easily be found and discovered, used and compensated for, simply by virtue of BEING IN THE POOL, and in the es-
sence, proportionally to the actual use of their works. Sounds an awful lot like Cable TV or like Radio, does it not?
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Paul, allow me to call upon your common sense. PLEASE start supporting the fact that we need a new LICENSE that can
create this flat rate because everyone will, by default, have access to music, in the connected, digital-natives-ruled world
that is quickly coming upon us. Not new sticks - new carrots is what we need.
Let’s face it, Paul and whoever whispered in your ears before your MIDEM speech: the user has won, hands down, in the
10-year old battle of "Us (the record industry) versus Them"; the system as we know it is bursting, the dam is broken, and
everyone is gearing up for the new models. Google will offer 'free music' in China, Asia and African nations are pondering
alternative compensation systems for music, and not a court in the (free) world will make Internet service providers di-
rectly responsible for the exact nature of the 1s and 0s they are carrying (unless, maybe, you also want to do away with
free speech, fair use and all that other ‘hippy’ stuff you seem to be alluding to).
No matter how much you liked the way it was 15 years ago, Paul, what you said (paradoxically) in your own speech is
coming true right now: "Access" is what people will be paying for in the future, not the "ownership" of digital copies of
pieces of music” . You are right on this, but where it all goes horribly wrong is when you start talking about whose fault it
is: the ISPs and all those California anarcho hippie geek tech companies that have been allowing people to use all that
music for free, and making billions on back of other people’s work. Give us a break, please. What really happened is that
they could not and would not be licensed under terms that would allow them to stay alive, and so… they didn’t, and they
weren’t. They had (and still have) the simple choice of shutting down or be illegal - because after a mere 10 years the mu-
sic industry has not gotten around to offering licenses that actually work, yet. And where have you, and the BPI and the
IFPI been during all that time, how did you / they try to change that and create value, rather than destroy trust?
All those great inventions of technology (e.g. the original Napster1.0) could have been used to the great benefit of the art-
ists and the other creators – but the threats to the middleman did not allow that. Staying in control was (and apparently,
still is) more important than making money for the artists – after all it was only the middlemen who ever really cared about
CONTROL, to begin with.
This desperate need for Control, Paul, emanates from your words, loud and clear, and it is this outmoded paradigm that
will run the ship into the cliffs; for you can, in the future, no longer retain all control and still make it work for the user. It is
THEM who are in charge now – can’t you hear??
And about those ISPs you want to force into submission and turn into assistant deputies of the MP3 police: they had to be
/ play ‘dumb pipe’ because there was (is – thanks to all those great people you support with your speech) no way for them
to avail themselves of a valid, legal, fair license – just like the Radio operators (remember RCA and CBS… anyone?) al-
most a hundred years ago.
On to another great McGuinness nugget: “for ISPs in general, the days of prevaricating over their responsibilities for help-
ing protect music must end. The ISP lobbyists who say they should not have to police the internet are living in the past --
relying on outdated excuses from an earlier technological age”
Paul, take a good look in the mirror: isn’t it the music industry that is relying on ‘everything outdated’: outdated licensing
schemes, outdated copyright versus broadcast definitions, outdated business models, and outdated hard-ball antics such
as yours at this year’s MIDEM - a speech that created fear and friction where openness and collaboration would be ur-
gently needed. How disappointing.
But you take it further, bizarrely: “I think the failure of ISPs to engage in the fight against piracy, to date, has been the sin-
gle biggest failure in the digital music market” to which I can only respond with “the decade-old failure of the music indus-
try to license the inevitable sharing and use of music on digital networks has successfully deprived artists and writers of
billions of dollars of income”. And why? Because the middlemen (a club of people to which you are confessing strong alle-
giance) don’t want to be lose control over their part of the value chain.
This - KEEPING THE POWER- is the real issue and this is what I took home from your speech. I, for one, can’t possibly
imagine that your client (U2 / Bono) would agree with your bottom lines here: let’s police all of the Internet, all the time,
everywhere, so that we can get some control back and run this show like we used to. Oh yes, with a small caveat: we’ll
talk about that trendy flat rate after you cough up those billions of dollars you owe us from messing up our game. That’s
just not enough, Paul. Sorry. This is not about rigging things up so that they still are all nicely confined and 'under control'.
The bottom line is that the proposed voluntary collective license i.e. the Flat Rate for Digital Music is probably the only
approach that will really work, going forward. It will provide digital music amnesty, offer the ISPs and their users insurance
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against inadvertent copyright infringement, afford compliance, generate very large pools of money, and build a safe, stable
and growing system of music consumption and creation.
Leaving no minefield untouched, McGuiness moves on to talk about the Mobile Music sector: “a lesson for the mobile in-
dustry internationally. Don't go the way that many of the ISPs have gone. Mobile is still a relatively secure environment for
legitimate content -- let's keep it that way…”
Paul: I hate to tell you this but there is no such thing as the mobile Internet, the mobile web, or your envisioned ‘secure’
mobile music world. For many people in the developing countries, “Google” will be their first English word, and they will
experience the web only on mobile devices (fka ‘cell phones’).
If you think that content security will be a top concern for the makers of those estimated 4 Billion devices that will be sold
in the next 18 months, think again. And if you think all mobile device manufacturers will be paying a nice hefty fee for the
use of all music (which is a must) locked up in only those authorized ‘handsets’ – akin to what your buddies at UMG have
received from Nokia – then you are indeed chasing an illusion (come on, now, really, a content-levy for cell phones – just
like CDs and DAT tapes???)
Here is the thing: the Music Flat Rate is only the Tip of the Iceberg. The Flat Fee Music concept I keep describing in my
books and presentations will only be the very tip of the iceberg of what will happen in digital music commerce if we truly
embraced this new ecosystem; in fact, I would say that while flat rate-derived fees would be quite substantial (and of
course, recurring!!) they would still only represent less than 30% of the total revenue potential that this new approach
would unlock. Some of the other revenue streams could be things such as on-demand live show recordings, interactive
webcasts, exclusive pre-releases, advertising revenue shares, special products and many different kinds of new audio-
visual products - the list of options is getting longer every day. A budding new $100 Billion industry.
But Paul asks: “So, to conclude -- who's got our money and what can we do”; to which I want to shout back: stop vilifying
the users or the companies that empower them (ISPs, search engines, or social networks) – that is a dead end street. You
won’t control them, ever; you’ve lost that battle already, GIVE IT UP. The new money is in the Network; all you need to do
is license it. Assemble all your friends from the BPI, the IFPI and the major labels as well as the rights societies, and offer
an irresistible blanket license for any and all music streamed, downloaded aka used on digital networks, and see the new
money roll in for everyone.
But this is the keyword where I think it ends for you, Paul: EVERYONE. It seems to me like you don’t want an equal and
fair remuneration for every artist and every company that represents artists – you seem hell-bend to stay solidly in control
of the financial fate of your artists, to create primary benefits for the company that owns their rights (Universal Music
Group). If all could be arranged between the top-selling artists and the biggest labels (and maybe that technology com-
pany you invested in…?), you’d be a happy man, right?
But sorry, Paul, to break this news to you: it’s too late for that. The USERS now run the show, no matter how much you
dread the idea.
And one more thing we need to clarify: beyond the proposed Flat Rate comes a huge tide of new revenues from what I
like to call ADVERTISING 2.0 –targeted, customized advertising-as-content represents an explosive growth opportunity
that many analysts have described as 100x as powerful as the current advertising market. A revenue share from next-
generation, personalized and targeted advertising would dwarf any money that we could make just selling 'copies' of
songs, and could indeed more than pay for the music in the network.
But Paul said: “it follows from the U2/Apple deal, the principle that the hardware mak-
ers should share with the content owners whose assets are exploited by the buyers of
their machines…
To which I would like to respond that the key to monetizing music is ON THE NET-
WORK not in the devices (or at least, to a much lesser degree). The music is on / in
the network, and the money is in / on the network. The solution is a Network License
not some private flat rate that one major schemes with one hardware manufacturer. It is not too hard to fathom that if you
scaled the Nokia / UMG concept to all devices and all music it would be financially utterly infeasible for the device makers
as well as their customers – and you would still be complaining that it’s not enough! The money is in the network, Paul –
it’s as simple as that. 1 Euro per week per user would do it, and 1 Euro is also feasible in terms of raising the cash from
advertising, sponsorship and upselling - resulting in a very powerful ‘feels like free’ model for the consumers.
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Finally, Paul ventures out even further: “the ISPs, the telcos, the device makers. Let's appeal to those fine minds at …
Silicon Valley, Apple, Google, Nokia, HP, China Mobile, Vodafone….etc, and the bankers, engineers, private equity funds,
and venture capitalists who service them and feed off them to apply their genius to cooperating with us to save the re-
corded music industry, not only on the basis of reluctantly sharing advertising revenue but collecting revenue for the use
and sale of our content. They have built multi billion dollar industries on the back of our content without paying for it…
This kind of ridiculous whining about other people making billions of dollars of the back of artists is usually reserved to
industry lobbyists, Paul – what in the world happened to you?? It is nobody’s job to ‘save the recorded music industry’ but
OURS i.e. those that are in this industry (counting myself in here, for now) – why would any of these people be responsi-
ble for the recorded music industry’s future? While I understand the emotional part I fail to see your business logic here,
Paul. We could have provided licenses to all those companies and people a long time ago. We could have collected a
revenue share. We could have used their networks to upsell to other music services. We COULD HAVE. But then there is
people like you and all those incumbents you so happily count as friends that would rather stay in total control than collect
those new monies, and that would rather call the police than to change their outdated assumptions and business prac-
tices.
Here is my bottom line to you, with all due respect for your great work with your artists, Paul: get with the new program or
at least move out of the way, and plant your poison pills somewhere else.
Nobody wants the Internet you are calling for, and nobody will want that secure safe controlled and policed music machine
you long for.
February 06, 2008 The quest for dominating in Search and Advertising ends up providing Free Music: Google
teams up with Top100.cn in CHINA. Finally: Google as Music Provider!
Compared to Baidu, Google is still lacking market share in China, THE key market for the Future. So now, as the Wall
Street Journal reports, Google will team up with Top100.cn to provide free yet fully legal MP3 downloads of music, with
backing by the major labels to be very likely (hey... what do they have to lose in China..?). Using free music to attract us-
ers to use their search engine and see their advertising - sounds familiar?
Says the WSJ: "The service, which is likely to offer access to tunes from three global music companies as well as dozens
of smaller players, could start in the next several weeks barring any last-minute hiccups. The music
pact marks a turning point in Google's battle with Baidu to gain dominance in an Internet market that is
soon expected to surpass the U.S. this year in number of users..."
The WSJ goes on: "In principle, search engines provide search for people to access music more effi-
ciently. In a broader way, that's a good thing," says Catherine Leung, general manager of Universal Music China. "It's the
links and encouraging people to download illegal content that's a bad thing..." That's where the Google effort comes in.
Vivendi SA's Universal Music and about 100 other foreign and domestic record labels have been working with Top100.cn,
a Beijing-based Web site that currently sells licensed music downloads for 1 yuan (about 14 cents) each, and Google.
Together, Top100.cn and Google would provide free MP3 downloads with value added serv-
ices, people familiar with the plans say. The new search options, for example, promise to give
users free access to a database of information about their favorite artists -- from concert list-
ings to links to special ring tones..."
My comment: paying for the music with advertising and by UP-SELLING and offering value-
added services - finally, it's here. And if in China, why not in other developing countries and
so-called second-world territories?
As I have said on many times before, content license fees can be covered by revenues from
Search and Advertising - there is enough money in this to make it work.
This is why the Google China thing a big deal: what we have here is the first embodiment of FREE MUSIC IN RETURN
FOR ATTENTION - something the readers of my blog should be quiet familiar with. Techcrunch has a good comment on
this, too: "The move into music provision would be a first for Google, and although this deal is directly in response to
Baidu, there is always the possibility that with one territory in place, complete with joint venture partner and music deals,
that Google could roll this out into other countries in the future.."
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On another note, the WSJ says: "Google has not provided any unlicensed links to music products in China even though
avoiding music has put the company at a disadvantage..." This, unfortunately, is further evidence for my previous argu-
ment (last.fm etc) that as far as music is concerned being legal seems to be a serious disadvantage. What a paradox -
hope Google can now break thru that.
January 23, 2008 All Major Labels to Stream Free Music on Last.fm (Wired.com)
This is HUGE news, for many reasons (incl. the implications for my own startup, Sonific). For one thing, I would like to
know how much they (CBS) paid the major record labels for this but my guess is
that it's very very serious cash and other fav-nations marketing guarantees.
You'd have to be CBS to get a deal like this done - scale is what matters, here -
and that scale they got by using without asking (but yes, cleverly so!). As much
as I love Last.fm, once again, it's clear: if you want to succeed in next-gen music
ventures, do this:
a) just use the labels' music in any way that you see fit (provided that is in some
sort of way legally defensible, at least in some instances, sometimes, somewhere)
b) build your audience based on that attractive 'free music' availability (remember... that's the idea behind radio!) and
make the best of any and all those gray-zone licenses.
c) get a huge company to either buy or back you, and
d) THEN do a deal to get the rights to use the music in the way that you wanted to, to begin with.
Did I get this right?
"Last.fm, the social media site acquired by CBS last May, now lets users play any song from the Big Four record labels
and thousands of indie labels and artists up to three times, for free. At a press conference at CBS' headquarters Wednes-
day, executives revealed plans for Last.fm to become "the first website to offer free, global, on-demand access to the
largest licensed catalog of music." CBS president and CEO Leslie Moonves kicked off what he called a "groundbreaking"
announcement by saying that the company had wondered, "Could this culture meld with our culture? And I'm pleased to
say it did.... Community is clearly the future."
Then Quincy Smith, president of CBS Interactive, took the podium to announce an overview of the plan to distribute music
from the Big Four major labels -- Sony BMG, Warner Music Group, Universal Music Group and EMI Music -- plus Ioda,
Naxos, The Orchard and about 150,000 indie labels and bands, all for free. Each label deal is different, according to
Smith. The total number of songs available now is 3.5 million, but the company is aggressively adding content, and Stiksel
said it will never stop adding music. "The mission is to have every track available," said Last.fm co-founder Martin Stik-
sel...."
Posted by Gerd Leonhard on January 17, 2008 Seth Godin on the Music Industry (great read)
Marketing Guru Seth Godin has some great morsels to share here. I hope this will be widely read in the music industry as
Seth is a very smart guy, all around.
Here are some high-lights that I just want to cut & paste here, since they are pretty much 100% congruent with my views:
"The music business had a spectacular run alongside the baby boomers. Starting with the Beatles and Dylan, they just
kept minting money. The co-incidence of expanding purchasing power of teens along with the birth of rock, the invention
of the transistor and changing social mores meant a long, long growth curve. As a result, the music business built huge
systems. They created top-heavy organizations, dedicated superstores, a loss-leader touring industry, extraordinarily high
profit margins, MTV and more. It was a well-greased system, but the key question: why did it deserve to last forever? It
didn’t. Yours doesn’t either."
"Copy protection in a digital age is a pipe dream. If the product you make becomes digital, expect that the product you
make will be copied...Most items of value derive that value from scarcity. Digital changes that, and you can derive value
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from ubiquity now. The solution isn’t to somehow try to become obscure, to get your song off the (digital) radio. The solu-
tion is to change your business. You used to sell plastic and vinyl. Now, you can sell interactivity and souvenirs." Interac-
tivity can’t be copied.
"Permission is the asset of the future...The ability (not the right, but the privilege) of delivering anticipated, personal and
relevant messages to people who want to get them. For ten years, the music business has been steadfastly avoiding this
opportunity. The opportunity of digital distribution is this: When you can distribute something digitally, for free, it will spread
(if it’s good). If it spreads, you can use it as a vehicle to allow people to come back to you and register, to sign up, to give
you permission to interact and to keep them in the loop. Many authors (I’m on that list) have managed to build an entire
career around this idea. So have management consultants and yes, insurance salespeople. Not by viewing the spread of
digital artifacts as an inconvenient tactic, but as the core of their new businesses."
"Whenever possible, sell subscriptions. Few businesses can successfully sell subscriptions (magazines being the very
best example), but when you can, the whole world changes. HBO, for
example, is able to spend its money making shows for its viewers
rather than working to find viewers for every show. The biggest oppor-
tunity for the music business is to combine permission with subscrip-
tion. The possibilities are endless. And I know it's hard to believe, but
the good old days are yet to happen..."
Great stuff, Seth. Readers: buy his books, They rock.
Posted by Gerd Leonhard on January 11, 2008 A good chance for a Songwriters Strike in 2008?
I think that Songwriters and Composers may very well go on Strike in 2008. Why? I have been watching the writers strike
in Hollywood with great interest. To me, this is another great example of how the new transparency of information and the
explosion in user-propelled media has empowered the 'Creatives' to realize that they are where it all starts. They chose to
finally make their demands, regardless of the 'you'll never work in this town again's, and to go up against a closed and
outmoded system that has left them little control over their fate, so far.
But here is the thing that's rattling my cage: I think it's basically the same situation for songwriters and composers.
Traditionally, they have put their fate into the hands of publishers who in return have put their lots into rights organizations
and societies, so called PROs (Performing Rights Organizations) and MROs (Music Rights Organizations). That all
worked okay - some would say - until the Internet came around (darn you Vince Cerf) but the result is a seriously monopo-
listic system in which a writer does not have a lot of choices over if, how, when and for what his / her music is licensed;
unless they are at the top of the heap it's take it or leave it.
In Europe, all writers must be a member of a society such as GEMA, SACEM, BUMA, SUISA etc, in order to collect any
public performance royalties, and this is an exclusive relationship (yes, really). You're either in or you're out (and I am out
now, btw, meaning no longer a member of GEMA), and if you don't like their licensing policies or their retroactive approach
to the Internet that's just too bad.
But after 10 years of watching these copyright functionaries fighting the Internet and all technology-driven changes every
single step of the way, it is painfully obvious that the rights societies and most industry bodies (such as the NMPA, CISAC,
MPA etc) have still not seen it fit to get on with it and actually come up with a realistic business model for licensing all
those new ways of using music on the Internet (see the latest disaster with Pandora, in the UK). In other words, they are
still humming and puffing, and falling all over themselves with legacy issues and internal paradigm-clashing - and thereby
effectively disconnecting the writers and composers from the flow of new money that comes from the web.
Instead of offering workable solutions in some sort of timely fashion, most of these organizations (well, okay, there are
some exceptions, such as SOCAN in Canada, and to some degree the American societies, namely BMI) have become
(in)famous for NOT LICENSING anything that does not fit their existing schemes, which, needless to say, are as aged as
a nice bottle of red wine. Just ask anyone that is in the Internet business and they will tell you stories that will make your
hair stand up ('how dare you want to use our music!"). Talk about not serving the market! Only monopolies can get away
with that (remember when the telephone company was in that position... ouch, never again).
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And of course, I grant them, they have tried (some of them), there are reasons, there are real hurdles, there are semi-valid
excuses, there are 100s of ways of explaining WHY this is still a problem - but the bottom line is that songwriters and
composers are STILL not getting paid for the use of their music on the Internet, to a very large extent.
No, not because those new web companies don't want to pay (they do). Not because there is no money in revenue shar-
ing or advertising or UGC (there is). Not because on the Net everyone wants it all for free (they don't).
No, just because most of the publishers and the rights organizations (i.e. the intermediaries in-control) still aren't ready!
They have taken forever to address these issues, they don't want to rock the boat and challenge their golfing buddies at
the record labels - and because ultimately their top interest is in keeping the status-quo, not in creating a new system that
would be beneficial primarily for the CREATORS and the USERS. These guys are neither evil nor stupid - but it seems
they just won't move until the heat comes on.
And so, heat we may get this year, I think.
Songwriters around the world (take a look at Canada, for instant) are starting to get seriously ticked-off at the lack of reve-
nues from the internet-based usage of their work (do you see the parallel to the writers strike now?). And they are tired of
the excuses they get from their publishers and rights organizations. And they hear about the 100s of Millions of $$$ made
from advertising revenue shares that they'll never get. And they watch 100s of video sharing sites sync their music to
video. And Billions of people listening to their songs on social networks, for free - because there is no standard license.
I think there is a good chance they'll get smart and look towards the real holdup here: their own representatives, the an-
cient system of how things used to work.
It's up to the Publishers and their Rights Organizations to preempt this development, i.e. to license the use of music on the
Internet now, here, today.
Or you may just have a mutiny: no new songs written until the question of remuneration is solved. Until a new blanket li-
cense is in effect that allows every internet portal, every telco, every ISP, every web broadcaster, every social network to
use my music and share the revenues with me (hey - does that sound like Radio?). Until my representatives deliver value,
and until they give both me and the users (aka fans) and the 'people formerly known as consumers' want we need.
The problem is not the users and the companies that serve them - the problem is within.
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