I just ran across this video of my 2010 talk at USI (Paris) and I think it's still quite relevant, so check it out, below. The topic of my talk and presentation is TeleMedia, one of my most popular memes and speaking topics - see the links below. From the USI event page:
"Fast and powerful mobile internet devices, social media, real-time search and location-based services are bringing major changes to how we communicate, connect, interact, share, consume, buy and sell, and learn. The disruption has only just started. Telecoms are poised to move up the food-chain, into content, services and experiences, while TV is quickly and totally converging with the web, and mobile devices will become the way most people will experience the Internet. Soon, data is the new oil, and 'the cloud' is the oil-well.
The traditional EGOsystems are becoming ECOsystems and the big Networks must now deal with 'The Networked'. Where is the future going, where are the biggest opportunities (and for whom, and where), and how can we start to adapt to the future, today? Futurist Gerd Leonhard will present the key trends and foresights as well as the most likely scenarios in technology, media / content, communications and advertising, for the next 3 years..." You download the PDF with my slides here, btw.
The video covers just about all angles of the music industry and provides a great overview of everything that's wrong (and could be righted, I guess) in digital music, and Michael sure has all the right answers to some pretty tough questions. In fact, for most of it, I couldn't have said it better myself:). Check it out. Michael and me do have a few things in common, as far as the message goes, I guess...
It was a pleasure to give a talk for my alma mater, Berklee College of Music, in Nashville (TN) yesterday, on the topic of monetizing music in a networked society (see the Facebook page). You can now browse the entire thing via Slideshare, below, or download the low-res PDF directly from here. Provided under creative commons attribution non-commercial license, as usual. Feel free to share and re-use.
It was a great pleasure to be back at the annual Noorderslagt / Eurosonic Event and Conference in Groningen (NL) and present a 60 minute talk on Context, Copyright and the Future of Music, in addition to hosting and moderating a panel called "Is Copyright the Devil" (whew... juicy headline...). I really tried to dig in even deeper as usual, and describe a plausible way forward for the music industry. Hopefully I succeeded... you be the judge of that.
After my talk, I had a spirited panel / conversation with Hans Bousie (copyright expert and cutting-edge Dutch lawyer) and Arda Gerkens (former Dutch parliament member for the Socialist Party) and really enjoyed it (and hopefully, so did the audience, see the tweets).
In my preso, I touched on quite a few topics including the Networked Society, the future of copyright, the need for a public digital music license, the shift from copy to access, and the new revenue streams for musicians, artists and composers. Check out the slideshow, below, or download the low-res PDF from here: Gerd Leonhard Context Groningen Music 2.0 LOW RES 6 MB PDF
Overall Album sales (including albums and track-equivalent album sales) declined 9.5% over 2009
Total album sales declined 12.7% over 2009
There were 240 million physical album sales in '10; a decline of 19% over '09
Digital music accounts for 46% of all music purchases in 2010; up from 40% in 2009 and 32% in 2008
Most importantly, in my view, while CD sales are (of course) declining further, digital sales have slowed down to a crawl i.e. there was only 1% growth from 2009 to 2010.
So what is happening? Here is my read:
The industry's digital carrot (*very small) & stick (*very large) strategy is failing. Most people won't buy units / single tracks / downloads / copies any more - they want unfettered ACCESS, total choice and user control (ouch), utter ease of transaction while limiting their costs, and above all, fair and irresistable deals. Not that any of this is new, really - but maybe this message can start to arrive, now?
The only legal game in town that really works as far as music is concerned, is iTunes, and that model has made Apple into the undisputed king (some would say, emperor) of digital music - software, hardware & devices - but less and less people are actually buying music this way, i.e. by-the-unit and at a significant individual price point. Plus, most of those kind souls that have indeed purchased something this way eventually stop buying as they reach certain spending limits (in my case, approx. $800). iTunes essentially punishes interest in new music because it makes us pay to download tracks we may not know, yet - hardly a model that will work for kids with tight budgets, and also a major reason why the much discussed longtail concept has not really panned out yet, as far as music sales are concerned.
Just like - sadly but again very predictably - we are seeing with the iPad, once the initial 'wow' factor and geeky excitedness is fading, only a very small fraction of the users will continue to buy content in the 'pay per unit' way that Apple is enforcing and that the record labels, studios and publishers have been clinging on to religiously.
The future is - as I have said many times in the past - in providing ACCESS to music, not in selling copies of it: unrestricted, unprotected, most likely flat-rated or bundled (think: ISPs and telcos.. and Facebook!), possibly feels-like-free or freemium i.e. ad supported (for a basic starter-level, at least), highly curated, socially hyper-connected, mobile, location-aware, nicely packaged (appified), with loads of extra values and upselling offers (think: downloads of live concerts, HD versions of streams, 3D etc), cross-media and multi-platform.
Let's face it, guys: there is loads of new money here, people are spending money on digital content. All you need to do is to let go out the idea of controlling distribution, selling copies and running your nice little empires that can tell 4 Billion connected consumers what to do, how to behave, and how to spend their money. You need to license the likes of Spotify, Simfy, Mog, Rdio and Google, globally, and help them turn bundled access to music and 'the jukebox in the sky' that Napster 1.0 was already hinting at, into new revenues.
This model needs to be co-created, not funded by VCs - and your strategy of milking innovative new ventures and entrepreneurs for a quick cash fix is killing the future before it even has begun.
The future is music (and most other 'content') in the cloud, where streaming will equal downloading (ouch... I can hear the lawyers are moaning), where branded content rules, where really smart / mobile / social advertising will pay for a lot of 'free' content (like it always has, btw) and where you can upsell all kinds of other music-related products to 80% of the 'people formerly known as consumers'. Not only that but you'll also save a huge amount of marketing money since you'll know who they are, where they are, what they like, and what they think (by communicating with them).
It seems like every single day I read about how Internet and mobile companies are struggling to obtain the rights for what they want to do, whether it's about music, videos, TV shows, films, articles, text and images.
Netflix seems to have been more successful at tackling this wicked problem of content licensing, at least to some degree, by - as cnet aptly puts it - 'building relationships in traditional means' (I guess this means playing nice with Hollywood? Read the article - those are good, old-fashioned golf-club paradigms I'd say)
Spotify is a fantastic music service, no doubt; very much along the lines of what Dave Kusek and me envisioned as 'music like water' in our 2005 book 'The Future of Music', and subsequently expanded on in my follow -up book, Music 2.0 (free PDF here). Spotify is not officially available in Switzerland but I have been successfully using it via a UK paypal account (after trying simfy.de and not getting anywhere with their really awkward and crash-prone iPhone app). Unfortunately, Spotify just can't seem to get the music labels and national rights organizations to bless their launch in many other territories, including the U.S. (read this Slashgear piece for more details ). All of this - you guessed it - because the record companies and the music publishers have not agreed on the licensing and deal terms for those countries, yet, and despite the fact that Spotify is already spending most of its VC money on paying for the music licenses. The fact is that there are no compulsory licenses available for on-demand streaming and flat-rate access services so unless these deals are negotiated nobody can touch it. Read about it here, or here (my Spotify-related blog posts), or via my July 2009 blog post on specifically why I think Spotify is unlikely to survive, or peruse the Zemanta-enabled links below for more enlightenment by some smart people
So here is the point I am trying to make: I don't think a purely free-market-driven and unregulated approach will work, in the future. Many large, incumbent media companies, publishers, record labels and other traditional intermediaries (i.e. the 'industry' as opposed to the actual creators) have every reason NOT to be flexible or even slightly forthcoming with their licensing terms and thereby support the deployment of new cloud-based, access-on-demand and flat-rated services. This is simply because their very existence may quickly and irreversibly change the entire playing-field, and may make it very hard for the incumbent rights-conglomerates to continue to effectively control distribution (and by extension, advertising prices) in the same way as before. These changes aren't for the better when you currently run the entire show, so why should you agree?
This is why Warner Music Group's Edgar Bronfman has said many times that he will not license any unlimited streaming-on-demand service, why Netflix - despite of (or because?) its vast growth - has been back and forth with the Hollywood studios on getting more content deals done, and why Hulu is losing steam because of the studios' concerns over future cable-TV revenue streams. Clearly, this is all about controlling and milking the market (i.e. the 'people formerly known as consumers') as long as possible. Yes, sure, just like the big telcos used to do before they had to let competition in. This is not about 'getting the artists / creators paid' or about fighting digital piracy - it's about maintaining a comfortable and lucrative monopoly position for the longest possible time. Which is OK, too - if it wasn't for the criminalizing effect it has on every single Internet user.
Most large, international media companies (disclosure: many of which are or have been my clients in some way or the other) and almost all major TV, film and music rightsholders are used to absolute control over the distribution of the works (and artists / producers) that they own or represent, and this simple fact used to result in getting much higher license fees - the other party had no choice but to take it or leave it; no license simply meant no (legal) business. This may sound somewhat reasonable in a mostly offline world (i.e. until just recently, when the mobile Internet started to take of), but on the Net, in a truly networked society, this kind of thinking plays out quite differently: refusal to license at a price that is affordable(and / or financially viable for a new, potentially huge but legally unprecedented player) simply encourages and produces piracy, because the desired content will become available anyway, legal or not, one way or the other. The reality is that there is no real control of distribution of digital content, any longer, and all models based on re-achieving that control will fail miserably. Witness the 100s of illegal movie sites that now stream pretty much any movie on-demand, or the many new IP-cloaking and re-routing services (commonly used to access locally restricted content services) that are currently flooding the market. Not licensing content to new players on actually survivable terms simply lets other, parasitic entities prosper by offering it without permission. Everyone loses.
My thesis is that - just like telecom deregulation - we urgently need new, open and public mechanisms that first significantly encourage and then possibly even enforce the licensing of copyrighted works for new services that require a new and more experimental approach, and that may end up serving the consumers much better than the traditional services. A 'use it or lose it' rule may be useful to that end; and as far as music is concerned I have been proposing a new, public digital music license for a long time.
In any case, I think that a system that continues to be based on deriving future benefits ONLY for the largest and most powerful rightsholders (again, by that I do not mean the actual creators, but the industries that represent them) is, in my view, simply unsustainable and socially indefensible in this dawning broadband-culture and in a connected, networked and interdependent society. We need better and more transparent EcoSystems and less EgoSystems; less empires and more Open Networks.
Let me have your feedback please!
Note: if there is some kind of problem with my comment box on this blog, please use Facebook or Twitter for comments, for now, or email me and I will post them.
I am delighted to be able to share this brand-new translation with all my friends, tweeps and colleagues that speak Portuguese. The essay was kindly translated by Paula Neves, Analista de Marketing Digital at Approach (Brazil); be sure to visit her blog or Linkedin profile.
Gerd Leonhard: Conteúdo 2.0: ‘proteção’ está no modelo de negócio e não na tecnologia (pensamentos sobre o futuro da venda de conteúdo).
Abastecido pelas agitações na indústria da música e, finalmente, com a transformação muito rápida dos livros para o formato digital, há bastante debate em torno do fato das pessoas compartilharem habitualmente isto é, redistribuírem conteúdo digital sem que os usuários paguem por isso. Como se pode monetizar o conteúdo se a cópia é gratuita? Essa pergunta é uma questão chave em todos os sentidos, seja com a música, com livros digitais, noticiários, editoração, TV ou filmes. Há o medo, claro, de que a partir do momento que um item digital foi comprado por uma pessoa, ele pode ser facilmente encaminhado para qualquer um se estiver num formato aberto, assim reduzindo significantemente a possibilidade de que outra pessoa pague dinheiro real por ele também (claro que o mesmo também é verídico para conteúdo digital supostamente trancado ou protegido – só demora um pouco mais). Não ter mais controle sobre a distribuição = não ter mais dinheiro. Certo?
Apesar do simples fato da GDD (Gestão de Direitos Digitais, ou Digital Rights Management em inglês) já ter se mostrado desastrosa no mundo da música digital (e agora já é praticamente o passado), medidas técnicas de proteção ainda vêm sendo investigadas como um método plausível de se garantir o pagamento, especialmente no efervescente setor dos eBooks. Isso me preocupa muito porque medidas técnicas de proteção são caras, atrapalham ou previnem a adoção em massa, encurtam ou matam o compartilhamento social, o que derrota o marketing usuário-usuário, normalmente limitam drasticamente o uso honesto, e são geralmente inúteis no combate aos piratas reais, isto é, os que têm intenções maldosas e criminosas de roubar conteúdo e vendê-lo para outros.
Não somente conteúdo – Contexto! A meu ver, o pensamento de que a distribuição de conteúdo tem de ser controlada para que haja qualquer forma razoável de pagamento é fundamentalmente equivocado por causa dessa percepção não-tão-futurista: numa economia aberta e enredada (nota: estou falando sobre hoje e não amanhã!) editores de conteúdo têm de oferecer seus bens de uma forma que não mais considere a distribuição como o fator central. Não deve-se vender (somente) o conteúdo (ou seja, meros 0s e 1s) e sim também o contexto, os valores agregados, os vários outros itens em torno do conteúdo. Venda o que não pode ser copiado.
A tendência irrefutável é que a janela de oportunidade de se ‘vender cópias’ (isto é, iTunes, música digital, Kindle, etc) está rapidamente fechando, pelo menos na maior parte dos países desenvolvidos. A próxima oportunidade, e já muito presente, está na venda do acesso e serviços de valor agregado, e no fornecimento de experiências ligadas ao conteúdo.
A partir do momento que abarcarmos que os usuários – as pessoas dantes conhecidas como consumidores – não podem ser reduzidas a meros ‘compradores de cópias’, poderemos investigar como eles gostariam de pagar por todo o resto também. Por exemplo, ao comprar um eBook os usuários não deveriam pagar meramente pela autorização da distribuição, ou seja, a cópia legítima das palavras, e sim também poderiam ganhar acesso a comentários altamente especializados, amigos e colegas que possam ler esse livro, avaliações, explicações, apresentações de slides, imagens, links, vídeos, referências cruzadas, conexões diretas com o autor ou o editor e assim por diante. Sim: conectar com fãs + motivos para comprar (como o Mike Masnich do Techdirt já resumiu sucintamente diversas vezes)....
It didn't take long for the TedX NewStreet (London) people to put the videos online at the TedX Youtube channel - great! Unfortunately my own talk got started while the wireless microphone was still on 'mute' so for the first minute or so (while I am doing my introduction) the audio recording was quite bad.
Therefore, I edited the video and scrubbed those 60 seconds; the result is below (using my own GerdTube / Blip.TV channel *you can get the iTunes podcast feed here). The original TedX Youtube version is below, as well, as is the slideshow, from my previous post. I think I really touched on some very important issues here, and I would be delighted to hear your thoughts on them. Fire away via Twitter, or Facebook, or comment below. And spread the word. Thanks.
It was a great pleasure to speak at TedX New Street in London yesterday (tweet flow is here, btw) I was allotted the usual 18 Ted-minutes to speak about the future of intellectual property and copyright - a piece of cake! Here is my presentation, below - let me know how you like it. Hopefully we will have a video on Ted.com pretty soon, as well. If you want a quicky download (rather than the high-res slideshare version, below), you can try this low-res PDF: Future of IP and Copyright Gerd Leonhard Tedx London LOW RES
The main shift is going to be away from the downloading of content and owning of CDs and more towards music in the cloud. That is going to happen with most media, starting first with music and then going into films and books. This is not just a music business issue. We are moving away from the copy to access. This is a very good model for the artist. In the past, most of the money was spent on the physical product – so the reproduction, packaging, shipping and retail store.
The artist basically got nothing in most cases. Skipping that whole process now means that the brand of the musician becomes the most important thing. This is very good news for the artist, the producer and the creator but less so for the industry as it’s much easier to sell a copy than it is to sell access. The idea that the artist just gets, say, 10% of the sold product is now out the window. Now the artist will give his agent or service agency some kind of fee – say 25% just as Nettwerk Records and other companies are already doing.
The issue is to get attention and clicks from consumers. If that attention is converted into a revenue share based on advertising, a subscription fee or an upselling process, then as soon as you have attention, you participate. We are still in the old system of counting on revenue per use. That won’t work in the future. The bigger your brand, the bigger the attention you will get and the more clicks you get, the more money you’ll make. I believe that consumers will ask for the access models to be free initially but then after they use it for a while they’ll be quite happy to pay so they can remove the ads or increase the quality of the stream for example. Music online will feel like free. There is plenty of money to be made from ads, but it’s just not there yet. It’s coming, though. We have seen that advertising just doesn’t work on the Internet.
It’s so easy to click away the ads or avoid them altogether. Advertising was essentially useless until now as today we are starting to see social advertising, such as on Facebook. Plus we have mobile advertising. Finally advertising is becoming more useful. The brands are no longer looking to spend 1% of their budget on social or mobile; they’ll be spending 10% or more. There is a total disconnect between the way a new business can be grown and how a lot of rightsholders perceive how the business will be paid for by Google or ISPs, for example.
That’s a very bad approach because it makes it impossible to legally grow a new model. You will be much more successful – like YouTube and Last.fm – if you don’t have the right licence and you just do it. That’s a real irony. I don’t think we’ll be able to support new services without a compulsory licence.
We need a compulsory licence for music use on the Internet so that companies like Spotify, MOG and we7 can use a licence rather than just bang their heads against a wall like they have in Germany and the US. A cloud-based model has to win out in the end, as the costs are so much lower, the sharing is so much easier. You can put all sorts of ads into cloudbased systems because you always know what the user is doing. There are lots of great benefits there. But the industry hates the cloud-based model as they lose control over distribution.
Below is a short Youtube clip from my presentation at CMC Dublin, June 11, 2010 (more details. and the PDF etc, are here). I also recorded the event on my own Kodak Zi8 but am currently having some trouble converting it into flash, so right now you can only watch it on my GerdTube channel (Blip.tv) in Quicktime, or just download the whole 800MB from there.
Last year, I was interviewed by Consumers International's Luke Upchurch for this really powerful film, during the 2009 TACD / Paris Accord meetings (see this presentation on the Future of Content), and a couple of snippets actually made it in here. Along with a few juicy snippets (incl. one by John Kennedy / IFPI), this film outlines the latest developments in this space really well - in fact, it's outright scary what is happening here - watch this movie!
To coincide with the second annual publication of
Consumers
International’s IP Watchlist, CI is launching this short online film,
looking at the renegotiation of the relationship between copyright and
consumers. This is a film about how copyright has become one of the most
important
consumer issues of the digital age; why corporate lobbying risks
criminalising the actions of hundreds of thousands of people; and what
the future holds for the fight for fairer copyright laws. When Copyright Goes Bad is for anyone interested in how copyright
is
affecting consumers.
Apart from my 20 own seconds of micro-fame, the movie also features: Fred Von Lohmann - Electronic Frontier Foundation;
Michael
Geist - University of Ottawa Law School; Jim Killock - Open Rights
Group; and Hank
Shocklee - Co-founder of Public Enemy. @Shocklee @michaelgeist @sunil_abraham
@eff
Please share, embed and pass on.
For a variety of
film formats,
blog commentary, language versions, additional footage and more, go here.
This nice-quality video was filmed on 10 am Sunday morning (ouch), January 24, 2010, at the annual Midem music conference, where I was giving a lecture on how I think record labels, publishers and artists can make money with music on the Internet, going forward. The slideshow was previously published here, but has been embedded below again, as well, so that you can click along with the video if you want. I really enjoyed the more intimate environment of the MidemNet Academy even though it meant that a lot of people that wanted to get in had to be turned away; maybe we can find a compromise for this, next year (150 people would be a good number of seats for this kind of thing, imho). This video is 55 minutes long and really packs in a ton of great "Music 2.0" stuff that I have accumulated throughout the year, so... dive in!
I will try to add this video to my YouTube channel as well but the 10-minute maximum rule really makes this a royal pain, so for now it's only available on my Blip.tv channel (you can subscribe to the free iTunes feed, here, in order to download all of my videos automatically) and as an audio-only version on my free iPhone and Android apps. Enjoy - and spread the word (use the options at the bottom of this post)
Keynote Speaker, Think-Tank Leader, Futurist, Author & Strategist, Idea Curator, some say Iconoclast | Heretic, CEO TheFuturesAgency, Visiting Prof FDC Brazil, Green Futurist
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