The New Generatives: Selling Music in a Connected World
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Transcript of The New Generatives: Selling Music in a Connected World
www.mediafuturist.comtwitter.com/gleonhard
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 [email protected]
twitter.com/gleonhardFacebook: gleonhardmore presentations at
www.mediafuturist.com
Thanks for your time!