Resetting the music business (good review of my keynote at SPOT festival)

Wired UK's Duncan Geere has just published a really astute summary of my keynote at the annual SPOT music conference in Arhus, Denmark, see below. It's not that I haven't been saying this for the past 10 years but I think I may have phrased it all a bit bitter:) See the slides below; and feel free to download my Music 2.0 book, here.

"At the Spot music conference in Århus, Denmark, musician and futurist Gerd Leonard discussed a series of possible futures for the music business. Leonhard isn't a fan of how the record industry has been run over the last decade or so. "The whole economy of music is based on big companies owning the rights. It's unsustainable," he said, comparing the major record labels to big oil companies.

"Do big oil companies represent nature?" he asked. "Of course not. Do the big record labels represent music? Probably not." Leonhard sketched out the reasons why people pirate music, blaming high costs and a lack of legal alternatives, and he also argued that cracking down on filesharing doesn't benefit artists. "We had 52,000 people sued in Europe over copyright infringement," he said. "That earned nothing for the artists. Only the lawyers."

But Leonhard is optimistic, arguing that music is simply migrating into something larger. "The business model of merely selling 'copies' of music is over," he said. "Let's redefine the meaning of selling. No-one knows what it means." Leonhard is a firm believer in the power of access models over ownership ones. Models where you pay a small recurring subscription fee to gain access to an enormous jukebox in the sky, just like Spotify (which he says he's a big fan of).

Leonhard claims that it would only require each person in Europe to pay two euros each month to generate revenues larger than the global music industry. That's not necessarily a practical thing to demand individuals to do, but companies have begun to roll subscriptions of this nature into other products, making this music tax more palatable. Telecoms providers have begun to bundle music subscriptions into their contracts, which is a way of making music "feel like free" to the consumer.

But that's not quite enough, he said, projecting a list of hundreds of legal music services from across the world onto a screen, compiled by the International Federation of the Phonographic Industry (IFPI). He claimed that most of them are dead or dying: "90 percent of the legal music services are bankrupt, or there but sorta not doing anything," he said.

To fix this, compulsory licenses, like radio licenses, are needed. "The free markets won't fix this problem. They won't work. We need must-license provisions, public oversight, regulation for the common good," Leonhard said."In 2017, we'll have five billion connected devices," says Leonhard. "75 percent of that will be mobile, accessing 50 or so platforms of content, sharing a €250 billion ad market."

To capitalise on that potential, Leonhard says, music companies are already diversifying beyond simply selling records. Labels have begun taking a chunk of all sorts of revenues -- merchandise, touring, premium content, sync licensing (getting music on television, and in adverts and movies) and other sources. "We're going to make money in 50 different ways. The first music business was a grand illusion."

 Ok... so far so good. There are 2 things you may want to look at in this context:

My slideshow from today:

From Ego to Eco: the future of the music business (Futurist, Author and Keynote Speaker Gerd Leonhard)

View more presentations from Gerd Leonhard

 

My 2020 video on Music Like Water (via Ericsson)

Related articles

• Watch this: Keynote Speaker and Futurist Gerd Leonhard on Shaping the Networked Society - a quick overview (mediafuturist.com)
• Audio podcast of Radio New Zealand interview with Futurist Gerd Leonhard: the opportunities and friction of ultra-fast broadband (and the future of paid content) (mediafuturist.com)