digital modes - a few choices for the music entrepreneur

Creative industries segment analysis

Manual

Physical

Digital

CraftsArt &

antiques

Architecture

Design & designer fashion

Publishing (incl. e-

publishing)

Music (incl. live

music)

Radio & TV

Film

Computer games

Artefact

MediaService

Creative process

Output

Performing arts

Technology-aided

Social media

Advertising (incl. display & search)

2008 global music sales

recorded music sales $18.42bn (-8% yoy)

recorded music sales in 2000 $30.81bn

cd sales down 15% to $13.83 billion

digital sales up 24% to $3.78 billion

(source ifpi)

EMI EBIDTA March 09 - £163m (up 219.6%)

Digital 21% (up 6.25%)

Warner 2008 Net loss $68m ($37m) Digital 26% (up 6%)

LiveNation $102.7m Q1 09 loss ($37.2m) Q1 Revenue $499.3m – 6% down Concert attendance

US fell 23% International rose by 17% Revenue per fan climbed 6% to $66.50

Number of live sponsors dropped 42% but total sponsor revenue climbed 17% to $21m

ITV Loss before tax of £2,732m (2007: £188m) Ad revenue £1,425 (2007: £1,489) £64m Total TV ad market decline in 2008: 4.8% H1 decline 0.6% BUT H2 decline 8.8%

$55.3m Q1 09 loss ($244.3m full year 08) Radio revenue fell by 24% Outdoor by 29%

Nendo 08 results £1.8bn profit on £12.2bn revenue – up 8.5%

Shipped 25.9m Wiis and 31.1m DS

Runescape 1 million subscribers – 3 languages

profit in 2006 - £15m

google

Q1 09 revenue: $5.51 (6% up on Q1 08)

’08 total revenue: $21.79bn ’08 net income: $4.22bn

Share of advertising spend by media

Source: ofcom, 2008

Internet adspend per capita

Source: ofcom, 2007

UK physical digital music market

source: OECD, 2006

uk and eu government

eu copyright directivecreative economy digital britain

copyright in 21st centurytechnology strategy board

consumers

don’t care about companiesunderstand brands

are fickle and variedget most music for free

will pay for great experienceswant to get involved and interactare more sophisticated than the

technology

entrepreneurs

persuade consumers to change behaviour

save time and moneyentertain and compelbe completely new

use technology in smart waysdo simple things really well

the player’s choice

play by the bookfly in face of the law

muddle on through

venture-backed start-upsare major labels’ revenue stream

new technologies don’t necessarily

equal new revenue streams

areas of focus

a&rubiquitous platforms

recommendation & discoveryremixing and mashupsexploit meta-data

monetise p2pcharge for access

resolve rights licensingmake smart tech choices

apply music models to other media

digital proverb

When music like sperm swims freely

among every body on digital network

many data babies are worth collecting