Music 2.0 - The Time is NOW (Gerd Leonhard at AMBC 2009 in Sydney
The Digital Music License & Music Like Water (Gerd Leonhard)
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Transcript of The Digital Music License & Music Like Water (Gerd Leonhard)
The Digital Music License: why, what,
how and whoGerd LeonhardMedia Futurist
www.mediafuturist.com www.twitter.com/gleonhard
www.mediafuturist.comtwitter.com/gleonhard www.payingwithattention.com
What I do:
‘I give ideas’
This is not against CopyrightThis does not propose that Music
should be free, periodThis is not a diatribe against the large, global music companies
This is about creating a solution that is fair, as well as socially and economically realistic
This is a plea for collaboration
Just like Radio: no more no less
Picture by http://flickr.com/photos/matteo86photonature/
I will not comment much on the proposed 3-strikes legislation
All of these ... without Permission
Copyright Gridlock
So far, Refusal was fruitless -It’s time to switch to
PermissionGoogle’s Eric Schmidt (when talking about the book publishers & Google):
“We write large checks when we have a great strategy”
My gallery of “Yesterday’s People with Yesterday’s Assumptions”
Let’s not confuse things
The Music Economy is Broken The System is certified dysfunctional
Source: Techdirt
A recent example
200 Million users seems entirely realistic20 songs per day =
4 Billion plays per day @ 1 Cent USD$40 Million PER DAY in license fees for the masters
14.6 BILLION USD per year in licensing costsPlus: costs for Public Performance in 50+ countries
Plus: payments to composersPlus: technical costs
Why this can’t possibly work
And this is not a unique problem
Private deals for public services?What choice did they have?
How much control does this leave them?Is this ‘fair business practice’?
But it gets worse
Connected people ‘consume’ differently
Sharing is the Key DriverAccess trumps Copy
Listening, Reading & Watching = Copying
Controlling distribution - controlling the flow of digital files - is the only way to
generate future music revenues1. Wanting to control the flow of copies on
the Net is an understandable response but entirely unrealistic - and not needed!
2. Copies of songs are no longer where the real value of music is - we must sell the scarce not the ubiquitous!
3. Legalizing what is already a de-facto standard is the best way forward
We have been here before
LICENSED!
What would this look like?
First, legalize it - give permissionAll use - all pay * or otherwise generate $ value
Many kinds of payments emergeRights are public, open and standardizedLicenses are available to every business
Data-Mining and Market Access is $ value, too
Public License + Build-in Revenues
+ Proportional Distribution
ISPs, Telecoms &Networks
LabelsPublishers
Rights Organizations PROs / MROs
Government
AdvertisersSocial Nets
Device MakersSearch
...
How would it work?
ProvideCollective License
Rev Share &License Fee
per User
“Pool of Money”
...want to align withArtists / Genres
Programs / Platforms & Services to reach
Consumers i.e. Users
$$$
Percentage of Revenues (10%) or Flat Fee per User ( 1 GBP/ week)
So who will pay if it’s not the users fka consumers ...?
ECOsystem not
EGOsystem
Music Industry
LegislationGovernmentRegulation
BrandsAgencies
AdvertisersMedia
Google China President Kai Fu Lee: “Mutual Interest, rather than Monopoly,
is the key to sustainable growth”
Telecom
Calculation examples50 Million applicable UK Users (estimated)
200 Million GBP / Month @ 1 GBP/week/user2.4 Billion per Year earned via the DML
2008 recorded music revenues: 1.36 Billion GBPAdvertising & Marketing Spend in the UK (2010): 25 Billion
Estimated % to be digital / mobile: 25% i.e. 6.25 Billion GBPYearly artist’s earnings at 0.1% of total usage: 2.4 Million
UK ISP Revenues & Marketing Budgets?UK Mobile Operators Revenues & Marketing Budgets?
UK CE / Handset Device Makers?
With a new Internet license for Music we
don’t just sell something - we also
buy something!
A new and very lucrative Ecosystem would emerge
Flat Rates, Bundles, Revenue-Sharing
Live-Concerts, Web-Casts, Virtual Shows...
Mobile Device Applications & Software
High Definition & Premium Media
Community Premium Services
Many other New Generatives
Permission
We don’t pay to eat all the food... we pay for access
If we had a public music license, this would already be money in the bank!
So why is there still so little revenue from Youtube, Myspace, Facebook...?
• Advertisers are always 2-3 years behind• Lack of permission for legal content has
resulted in much slower adoption• Lack of public license has deterred new
investors• Mobile broadband and smart mobile
devices are just now starting to take off
With a digital music license, the Longtail & Success in the Niches becomes very real, too
Image: Flickr.com/WhiskersandWhispers
And this would become a huge business, too
Why this is good for the Creators
Attention turns automatically into $$
Distribution is available to everyone, by default
Many up-selling options will emerge
Direct market access is included
Marketing costs will be greatly reduced
And it’s not just the $$$
Actual, real-time Usage Data
Direct Market Access
Summary: my proposal *since 1999
• Legalize it: a public, collective, open
License for the use of Music online
• Collaborative, cross-industry efforts to
develop new, web-native revenue streams
•A new social contract for Music
Music Like Water
Let’s do what’s right for Compensation not for Control
Let’s generate future revenues for the Creators not just the Lawyers
Let’s do what’s right for Social, Cultural and Business Reasons
The Digital Music License
• email me at [email protected]• twitter.com/gleonhard• facebook: gleonhard• more presentations at
www.mediafuturist.com
Thanks for your time
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