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august 30, 2007:
on-demand streaming of music on social networks and blogs
this is the next radio!

Partly because of my general work as a futurist, and partly because of my role as Co-Founder and CEO of MusicAPI provider Sonific, I have been very busy analyzing social networks, blogs, and other self-publishing platforms, and their importance to the music (and media) business. I will be publishing the results as part of my new book (The End of Control) soon, but my early conclusion is that this is the birth of the next iteration of radio that we are witnessing here. If you recall, radio was first based on “pirated” unlicensed content, too – unwanted and ubiquitously hated by the mu- sic companies since they considered it a replacement and cannibalization of solid revenue streams (performances and sheet music, mostly) that they were counting on and did not want threatened. (Much like CD and download sales, today!)

But then hundreds of stations were launched around the globe, radio became something that everyone loved and used (yes…largely also because it “feels like free”), they all used whatever music that wanted without a definitive license (if any), and guess what: After ten years of just standing by and not giving their blessings, the music companies finally had to agree that radio was, indeed, driving sales of music and that it should therefore be allowed to exist. The irony, of course, was that the U.S. labels did not even manage to get any revenue share from the radio operators; only the publishers did (in the U.S., that is). Would they have gotten substantially more if they had agreed on a revenue share right from the start, before those radio networks became the driving force behind music sales? You bet!

So here is my urgent appeal to the record labels: License the social networks with a blanket, full-length-track (streaming) revenue-share-based license now, and get your foot in the door before it jams up, and before they can successfully argue that you need them more than they need you. Mark my words: Streaming music on-demand, fully interactive, fully share-enabled, full-length-tracks, will become a default setting on the social networks, regardless of the record industry’s “permission-denied” attitude. And we are already talking over 220 million people, 700-plus sites and services, growing something like 250% every year. That’s potentially billions of $$$ in revenue shares from ads, up-selling, bundles…