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10 new Generatives: Selling Music in a connected World

What I do: www.mediafuturist.comwww.twitter.com/gleonhard

Photo Credits: as indicated, or via iStockphoto

None of these ideas will work if...There is no real merit, value and

uniqueness in what you doYou don’t have an audience (attention)You are not willing, or not able to talk

to your fans, all the timeYou really want to learn how to swim

but are still afraid to get wet

Merit is where it all

starts.

Merit, Quality & Uniqueness

AttentionConversion

Money

Making money is a consequence of

Attention (not the other way round)

Note: there is no one-fits-all recipe!

Not all Music is the same

Not all Money is the same

Not all Users are the same

Not all Cultures are the same

1.A real-cash transaction of any kind (often pre-consumption)

2.Revenue Sharing (usually post-consumption)

3.Non-cash remunerations4.Upstream payments

(Freemium)

So what is ‘Monetization’?

Getting Paid for Creation *Hat tip to Shelly Palmer

I payYou pay

3rd party pays

I pay

3rd party pays

You pay

I pay

3rd party pays

*constantly changing variations

Expect extreme fragmentation of Music Commerce Models

2 important distinctions 1) Monetize collectively

2) Monetize individually Flat Rates

Public Performance

Broadcasting& Webcasting

Bundles

BrandingSync Licenses

Revenue Sharing

Blanket Licenses

Music Sales

Many others (coming up!)

Monetize collectively

Flat Rates, Bundles, Revenue-Sharing

Live-Concerts, Web-Casts, Virtual Shows...

Mobile Device Applications & Software

High Definition & Premium Versions

Community Premium Services

Many other New Generatives

Permission

What does ‘selling music’ really mean?• iTunes sales• CD sales• Songs used in Ads or Games• Youtube clicks?• Spotify plays?• Last.fm plays?• Facebook or Mog ‘Like’?• Bookmarked song?• Forwarded link via email?

How will you measure success?

The Music 2.0 Model

Artist / Creator

Business ModelsBusiness Models

Business Models

Music Commerce 2.0: don’t try to sell what is Ubiquitous - sell what is

ScarceSource: Chris Brogan

What is scarce? What could you sell?Users’ time and attention Offers that save time, and

award / keep attention

Curation and Selection Filtering, Context

Offers that save the users from the overload and filter-failures

Trust Offers that generate trust and create personal connections

Meaningful experiences Offers based on unique, personal, real experiences

Meaningful relationships Offers that provide for real conversations and connections

Users’ time and attention Offers that save time, and award / keep attention

Curation and Selection Filtering, Context

Offers that save the users from the overload and filter-

failures

Trust Offers that generate trust and create personal connections

Meaningful experiences Offers based on a unique, personal, real experience

Meaningful relationships Offers that provide for real conversation and connections

Sell via Twitter....?!

Source: Digital Media Wire

How Dell does it Source: Paid Content.org

? = $® + © = $

The search for New Generatives

= $Networked Model

Broadcast Model

When the browser becomes the iPod...

Source: istockphoto

The Toll-Booth Challenge: how tomonetize ACCESS rather than copies

From Chris Anderson’s “Free” Presentation

Source: Wired.com

Free gets you to a place where you can get paid.Quote by Fred Wilson, Union Square Ventures www.avc.com

“Free” only makes sense if you can actually convert

Source: Slideshare

Charging for saving time...

Free to Paid: Examples

The future is no longer binary....

It’s fuzzy.

Source: Chris Anderson / Wired

versus

It’s not either... or!

Hybrid Models in many variations

0

25

50

75

100

Was Will be

Price of legal copy’Number of legal, known, engaged UsersPremium Buyers (i.e. converted users)

Music Pricing Futures

The Mobile & Social ‘Consumption’ of

Music is the #1 Growth

Opportunity

Music Products

as Software on Mobile Devices

Source: Gigaom

Mobile & Social: the key opportunities

The next format shift: Music as... Software!

Examples

New packages... new $$

My top 10 for ‘Monetizing Music’from music products: downloads, CDs etcfrom music services: streaming, bundles, revenue sharing, flat-ratesfrom broadcasting & public performancesfrom licensing: synchronization / B2B dealsfrom branding & sponsorshipsfrom live performances, concerts, eventsfrom virtual concerts etcfrom virtual goods (licenses)from new kinds of ‘stuff’ (merchandising etc)from direct-to-fan services

Direct-to-the-fan offerings

Mike Masnik (Techdirt) nailed it, last year

The process

1.Attract the right people by offering relevant Content

2.Get and hold their Attention, build Trust

3.Think Followers not Users4.Offer added values to

convert followers into $$

Source: STLPartners / Telco20.net

The Vortex Principle

DownstreamUpstream

The mission: get the vortex to spin. Connect upstream and downstream opportunities.

Upstream Revenue Opportunities: Some Examples

•High-Definition Content (Classical, Jazz, Concerts...)•Concert downloads (after attendance, or without)•Virtual concerts, events, clubs•Virtual goods (e.g. wallpaper, icons, greetings etc)•Fan packages (direct connection to artists, pre-

releases, customized editions, special privileges etc)•Special products 2.0: compilations, audio-video

packages (see SoundWalk), mobile applications etc•Next-generation physical products (e.g. 2 TB

interactive & connected DVD+)•Custom-made, on-demand merchandising (see Nike+)•Many more that are yet to be invented...

Sell downloads, CDs... Copies

Selling copies is only the tip of the iceberg

Yourtask: to

define and exploit what’s below!

T h e I n t e r n e t

Please: forget most of what you know about Advertising

About Advertising and $ for MusicYes, it has been disappointing up to nowAdvertisers are usually 5 years behindGlobal spend on Ads: ~ 700 Billion USDEvery large audience can be monetizedMobile, video and social media ad budgets will dramatically increase in the next 18 monthsIt may take longer than anticipated - but will end up much larger than we thought!

Yes, there are serious $$ in Advertising

•~ $ 900 Billion USD Global Advertising Spend in 2012

•30-50% shifting to digital media / interactive / mobile

•Opt-in, personalized, targeted Advertising = Content

• Ads have always paid for Content

Virtual Items: a huge opportunity for Music!

Where are the

new markets?

Do get into Branding you have to be a ... Brand!

Rivers of Content - big Opportunities in:

The New Generatives

5%15%

15%

10% 20%

15%

20%

Content SalesSelling ContextSelling CurationSelling TimelinessEmbodiment / PackagingSelling RelevanceOthers

Action Spots (Summary)• Mobile (Applications!)• Advertising / Revenue Sharing (e.g. Social

Networks, Search, Portals & Communities)• Flat Rates & Blankets (fka Broadcasting, now:

Telecoms, ISPs and mobile operators)• Synchronization (TV, ads, movies, games)• Branding & Sponsorships• Virtual Items• New Music Products (RBT etc)• Up-selling from ‘free’ (High Definition, AR etc)• Customization & Personalization• Virtual concerts & events

As Steve Jobs says:

Stay Hungry. Stay

Foolish.

email me at gerd@mediafuturist.com

twitter.com/gleonhardFacebook: gleonhardmore presentations at

www.mediafuturist.com

Thanks for your time!