Alright then... you don't think "Music 2.0 in 90 seconds" is enough. You don't think 3 minutes really do it, either. You liked the PDF but you want the talk. I heard you. So here is the full 18 minutes of Music 2.0, in 2 parts, thanks to the ingenious Youtube limitations (but hey... it's HD now so why am I complaining?).
Here is a link to the MP4 file (410MB) if you want to watch on while biking in the woods;) Plus: remember that you can get it all for your iPods and iPhones by subscribing to my GerdTube.net / Blip TV iTunes feed (except for this one, though - for some reason the encoding just won't work for this file).
The amazing power of online networking and collaboration, open platforms, creative commons licensing and crowd-sourcing (whew... that's a mouthful!) has manifested itself once again: for the past 9 months, the tenacious and dedicated Zvonimir Dusper (Dus) from Croatia (LinkedIn profile) has been hard at work translating my entire Music 2.0 book into Croatian language (see the English book site here, download the English version as a PDF here, buy the dead-tree version or U.S. letter size book PDF at Lulu, here, visit the Amazon.com book page [incl. reviews] here).
The book is now available as a free PDF download and in a print version via Zvonimir's Glazba2.0 site - check it out and please forward this post to anyone that may be interested in reading Music2.0 in Croatian (you can use the tools provided, below)
To receive the free PDF please use the email box on the left site of the Glazba2.0 site (see here >). Enjoy!
PREDGOVOR HRVATSKOM IZDANJU Tematika “2.0” u posljednje vrijeme sve više okupira medije (nove i stare :-), pa smo, osim već razvikanim Webom 2.0, sad bombardirani i Novinarstvom 2.0, Marketingom (komercijalnim ali i političkim!) 2.0, Ekonomijom 2.0, Sociologijom 2.0 i drugim raznim inačicama tog fenomena, među kojima nas, ljubitelje glazbe i/ili glazbene profesionalce, najviše zanima upravo tema ove knjige – Glazba
2.0. Riječ je o promjeni iz sustava kojim je dominirao princip “od-vrha-prema-dole”, u sistem “od-dole-prema-vrhu”, u kojem korisnici/potrošači svojim sudjelovanjem u interaktivnim online mrežama grade tkivo budućih socijalnih ekosistema. Pažnja je postala nova valuta, a poslovni princip vrlo jednostavan – ako je privučeš dovoljno da se posuda prelije, višak možeš lako pretvoriti u novac. Kako god to zvučalo jednostavno, živjeti u 2.0 svijetu znači imati hrabrosti za radikalnu promjenu svojih navika, i odustajanje od tradicionalnih očekivanja i (nerealnih) projekcija budućnosti. Budućnost ne dolazi, ona je već tu, samo je neravnomjerno raspoređena – da citiram Johna Cage-a (taj sam citat, naravno, “pokupio” iz ove knjige :-) ....
I did this in early 2008 but it's still very accurate. The video was shot by my friend and fellow blogger Jonathan Marks, in Amsterdam, and talks about how artists and musicians can use the Internet to their advantage. Hope you like it! You can find the same video on my Youtube channel, btw, here.
"The internet is radically disrupting most of the traditional content
distribution and selling models, starting with music and games,
followed by TV, film, books and print publishing. Once everyone
is always-on, mobile and hyper-connected, and everything is available
everywhere, how will content be created, distributed, marketed,
consumed, and paid for? Who will do what, for whom, and how will the
traditional players such as broadcasters, record labels, publishers and
distributors adapt? If new players, starting with telecoms, device
makers, advertisers and brands, indeed move into the content business,
what will be their challenges and opportunities?
Given the
challenging financial climate, how do we reconcile the need to reward
enterprise and secure sustainable revenue streams, with the
expectations and demands of the “freeconomics” generation? What kind of
legal, regulatory and cultural framework do we need to ensure that this
new eco-system of creators, consumers and intermediaries generates more
benefits for all involved?
Speakers: Gerd Leonhard, media futurist, author and blogger; Richard Titus, Controller of Future Media, Audio, Music & Mobile, BBC; David A. Smith, chief executive of Global Futures and Foresight (GFF). Chair: Ralph Simon, CEO, The Mobilium Advisory Group and Chairman Emeritus & Founder, Mobile Entertainment Forum - Americas.
I have mentioned Google's music-related activities in Chinaa few times during the past 2 years; and just yesterday this topic seems to have heated up considerably. I think these developments are crucial and need further exploration.
As you may know, Google owns a good chunk (or all?) of the Chinese search engine Top100.cn, one of the biggest rivals of the Chinese super-portal and ruling search giant, Baidu. However, Google is still a more or less distant second in the Chinese search market (in 2008, Google had approx. 16.6% vs Baidu's 76.9%) and really needs its Top100 property to better compete with Baidu. The major issue here is - you guessed it - the availability of CONTENT- or rather, the simple displaying of links to millions of music & film files that those hungry freeloaders i.e. digital natives want to stream or download. Baidu allows this - in fact, thrives on it - while Google / Top100 does not (i.e. it filters and removes the links to the files). This is a huge handicap for Google, because the filtering of those content-links is basically driving away all of those 100s of millions of Chinese Internet users that are looking for just that.
Realizing that the real value of the users is in their participation and engagement, and then in paying-with-attention, Google has clearly pursued a strategy akin to the 'Music Like Water' model that I (and Dave Kusek, my partner-in-crime for "The Future of Music") have also described countless times: Google will simply provide the platform where music can be turned into money, by connecting the user with the content they want right where they already are (i.e. the search page), while gradually but aggresively monetizing their presence and their clicks via 3rd party payments - and this does not mean just ads. Sounds simple but maybe this has not yet been financially feasible in the past - today, any new money for the music companies is welcome, I guess, so here we are, finally: Search with us and we'll give you Free Music. Kai Fu Lee Image via NYT.
Clearly, it is much better for Google to offer and develop a new payment logic and mechanism for the music that is being used, i.e. to somehow license and pre-pay for it (I call this 'being the lubricant of the ecosystem') until such time where the revenues from advertising, up- and cross-selling are big enough to pay for everything, and quite possibly beyond that, as well. And as far as the music licenses are concerned - otherwise a no-go minefield that few Internet companies have crossed in the past - China is clearly a very good place to start as most of these new revenues will be 'found money' for the record labels.
Total Telecom reports: "Record companies will take roughly half of any revenue from banner ads
placed on the page users see when they are downloading or streaming
songs, with Top100.cn taking the remainder. Google could benefit from
increased traffic on its Chinese site, and can sell its trademark
search ads on the search page" The bottom-line? For all parties, it is better to deploy new kinds of ads (think mobile - that will certainly be key), sponsorships and affiliate links while the music is being used (fka consumed;) and to thereby fund thepool of music licensing costs, then not to get involved and leave the turf to all the other guys that don't play by the rules, anyway.
Now, Google has apparently licensed 350.000 tracks from all major labels (how long did that take... I am afraid to ask... *rant alert) and many leading Chinese record companies and artists, and if you are logged into Top100.cn, and based in China (sorry - no access from EU / US), apparently all the music is yours to stream and download.
So: Google pays for the music to get our attention for their ads - sure sounds like a familiar strategy. Radio and TV broadcasting, anyone?
Another interesting morsel is that apparently streaming and downloading is treated as pretty much the same thing (again, from the WSJ coverage, see link below): "Google's Lee said songs on the service are downloaded or streamed
around 1.5 million times a day, and he hopes the number will eventually
be many, many times that". I believe I have mentioned this basic fact of Internet music a few times before, too: streaming & listening IS downloading, access IS ownershop, and that's that. The legal artifacts remain, I guess...?
Now, just because I won't want to agree with the major labels and their lobbyists too much;) - here are my big questions:
If this works in China, why not do this everywhere else? If this works for Google, why not for telecoms, ISPs and mobile operators? If this works for music, why not - sooner or later - for music, TV, video, books and newspapers?
First: China does not have much of a business of 'selling units', i.e. there are no Billions of $ in selling CDs or single-track downloads. Therefore, any money that the rights-holders (i.e. the record labels and music publishers, and hopefully the artists) can actually get from anyone in China is probably very welcome; and that is exactly what the Google / Top100 deal will provide. And even though it would be a fair bet to guess that this deal is probably not coming cheap for Google China, it is probably still quite doable since the 'competition' of physical music sales is negligible and so-called 'cannibalization' of traditional music sales is not a major concern for the record industry in China. This would of course be substantially different in the UK or Germany where CD sales and the omni-present iTunes still generate Billions of Euros per year. But this is the lesson: someone had to put some money down. Congrats to Google / Top100. Next: the telecoms - within 6-9 months, imho.
While the cannibalization prevention is, of course, entirely reasonable (if you still sell units), it does beg the question: why do those lucky Chinese Internet users - many of whom may never had to worry much about potential copyright issues, 3 Strikes+Out ideas or MP3-server raids - now get a de-facto feels like free music service, while we - the more or less faithful and compliant residents of 'The West' - still need to pay 1 Euro / 1 $ for each single download on iTunes, $3 / month for Last.fm (ouch) or run off to the record store, or order on Amazon.
This clearly does not make sense: it feels a bit like we are being penalized for having actually paid for our music until now. So, some will surely argue, does this mean we should stop paying for music until such deal is being offered in Europe as well? You tell me - but it's sure worth a discussion, I think. It seems to me that this model is workable around the world now - and not just for / with / via Google - and that it should be pursued in Europe and the US, as well. Give us a licensed platform provides 'feels like free' music to the users, based on collective and public blanket licenses that can enable anyone that wants to offer music with what they do, while paying for the licenses with the traffic that those offerings, the added values, the platforms, will generate.
Here is another interesting quote from the WSJ: "I can't overstate how important the new Google service is, said
Lachie Rutherford, president of Warner Music Asia Pacific, which is
making its entire global catalogue available in China as part of the
deal: until now, the online market in China has been completely
un-monetized by the music business"
This strikes me as a very interesting way of putting this: Lachie / WMG: isn't the entire Internet music-sharing economy (i.e. P2P, stream-sharing, drive-sharing etc) un-monetized, as well? And why is that? If WMG can do this in China because their is no previous unit-sales income worth mentioning, why not do it for the Internet, period? Why not license Google - and Facebook et al - and the ISPs in much the same way? Or will you just do this in places where nobody paid anything to begin with?
Techdirt has a very fitting comment, on this (see the link below): "The fact that the labels are moving forward with this plan in China,
given its reputation as the wild west of copyright infringement,
undermine their contention that they can solve the supposed piracy
problem with legal or technological means elsewhere. Furthermore, it
exposes the reality that what's staring them in the face is a
tremendous opportunity, not a problem"
Not much to add here, except for my usual Lessig-esque mantra "Compensation not Control". Google + Telecoms - will you do that for / with us, please? This year?
The UK / EU web is buzzing with the news that Youtube (Google) has started to block or remove UK music videos because they have not been able to strike a new music licensing deal with the PRS-For-Music, the UK rights society which represents the songwriters and the publishers. I particularly like the coverage of this issue by TelecomTV.com, here, but a lot more links to other coverage can be found below.
As is my habit, at times, I want to quote and comment. Before I get started, though, I want to point that obviously I don't know the terms of the license that were suggested by either Youtube or the PRS, so therefore I cannot comment on whether either one of them is realistic or not. I just know from my own experiences (among many others, with the now defunct - RIP - Sonific) and from many other deals that I have observed, that very often the respective proposals are 20-50x apart, i.e. one party may suggest 1 cent per stream while the other party wants 20-50 cents - mostly, simply because they can; after all, the rights holders enjoy the protection of having the exclusive rights to license their songs. I would not be surprised if that was the case, here (my exact guess is something like 10:1)
Anyway, here we go, from TelecomTV.com "Yesterday YouTube
announced that it was going to take down all the premium music content
currently available to UK YouTube users because it had failed to hammer
out a new licensing deal with the UK's Performing Rights Society (PRS)
for Music, a notoriously hard-line royalty collector. YouTube said the PRS wanted more royalty payment for each video view
than YouTube could ever make from the ads situated next to each"
My comment: this points to the root of the problem, right away. Any deal between the mighty Google and the still-trying-to-find-the-right-$-model Youtube and the rights-holders' representatives has to be about sharing the revenues that are actually achievable, in the market, here and today, and jointly building a system that can generate more and more revenues, tomorrow and beyond. Again, as Larry Lessig says, and as I have proudly annexed from him, it's about Compensation Not Control! To the PRS: NO, you cannot have both - and it looks like you just decided against Compensation???
Unfortunately, this detrimental mindset has become a default seeting: many if not most of the rights societies in the so-called developing world, and now apparently the PRS, too, have adopted one of these 2 strategies: a) if a potential licensee is still too small and economically insignificant to warrant their consideration, they will not offer any license at all, unless it neatly fits one of the existing templates b) if a potential licensee is large, juicy, popular and financially connected to an entity that seems to have verrrrry big pockets (see Last.fm, Myspace, Youtube, Facebook... maybe), they will ask for the moon and try take them to the cleaners. Even better if that entity has been previously in-breach of the existing licensing traditions and regulations - more leverage is always a good thing, right? Just study the mind-boggling story of my favorite web-radio service, Pandora. Never mind that this kind of 'it's my right and I will fully exploit it as I see fit' - thinking is also pretty much what has gotten us into this horrible economic crisis, as well - but that's another story.
None of this has anything to do with real, honest and open intention of building a mutually beneficial and future-oriented model, and everything to do with what I like to call Economic Egoism that is effectively set in stone i.e. law by some outmoded laws from over 20 years ago. As long as rights organizations -whose tasks it is to license music not to forbid its use - are pursuing this strategy we will not get to a point of 'peace' with all those new entities that clearly want to use, and pay for their music.
The PRS published a very revealing statement when Youtube announced their decision to play hard-ball and remove the music videos - here is the nugget: "Google had revenues of $5.7bn in the last quarter of 2008". What does that have to do with negotiating the fair and equitable licensing rates for music? PaidContent.org has some great comments on this issue, interviewing YouTuber Patrick Walker, including this one: "to suggest that, because Google’s a big company, we should just suck
it and pay a ridiculous rate is not something that we’re going to stand
by...it’s hard for new models to emerge when the starting point is a massive loss on a per-stream basis".
In fact, I believe that this kind of attitude from rights organizations, publishers and record labels will most certainly lead to government
intervention, sooner rather than later, since a dysfunctional market is not good for anyone - and clearly, this is what we have now, and it appears to be here to stay. I think... I have said it before:)
So here is my message to the PRSForMusic (as they are now called) and their members (hopefully they have a say in this, too): pleasssse get off this bizarre and decidedly Web 0.0 idea that Google should now be paying for everything that you think has been 'stolen' from you on the Internet. Instead, give YouTube a flexible, open, transparent and realistic license that gives everyone room and time to MUTUALLY develop this model, going forward. There is nothing to be gained by refusal! Start to cooperate rather than to try to dominate these conversations. COMPENSATION NOT CONTROL. And do it now, or have somebody else force you to.
This is clearly a very cool idea, and something I have been looking at for quite some time: in the dawning age of rapidly exploding mobile app stores, on 5+ platforms, and with something like 2 Billion always-on smart phone users, we can now start selling music as software packages, i.e. in any UI/UX, multimedia, online/offline format that fits the artists' specific users and locations. Bands and artists, their managers, agents or labels and even publishers can select any combination of audio, video, pictures, texts, news feeds, games, twitter updates and social media 'rivers' to update the bands fans at any time, anywhere in the world.
My hunch is that most artists will probably have basic free versions available, at first, followed by premium apps that offer considerably more value and will cost from a few extra dollars all the way up to even $50 per user - and most importantly, lots ofup-selling will be fueled through these apps. Think live concerts webcasts and downloads, premium video footage, remote backstage access, preferred access at concerts, merchandising etc - once I am hooked on the band, using this app, I make the perfect case for pitching something else to me.
I have said this a few 1000 times in the past, but here it is again: Music as a service (i.e. get / buy / bundle access first, and only then buy products), and now, Music as mobile software packages may well be the next format after the CD.
Take it a step further and think of how advertisers, brands and other partners could (and will) sponsor or co-present these apps, and therefore align with artists that make a good match with their branding strategy (see Groove Armada & Bacardi, Sting & Jaguar), and pretty soon most mobile music apps will be free or as I like to say, Feels like Free, for the users. Of course, downloading i.e. the ability to keep music must be part of it, as well - especially in the developing countries where easily available wifi/wlan is not that far along quite yet. I would expect that this will be part of many premium mobile music apps very soon. Stay tuned - this is a major trend, for sure.
I think creators now need to get paid for the USE of their work, not (just) for a copy. On the web, everything is a copy, every listen / watch / read / use is in fact a copy; computers are simply copy machines by default. If creators and rights-holders stick to the old definition of 'copy' and the corresponding, unit-based mode of how they used to get paid (e.g. the mechanical license for each download of a song), then we will continue to have a total mismatch between what 1.4 Billion Internet and the converging ~ 4 Billion mobile phone users are willing and / or able to pay, resulting in a drastic loss of revenues that could be harvested via revenue sharing, bundling and other collaborative, usage-based models. Check out the slideshow below. More on what I call "21st Century Content Economics" later today - I will publish a PDF with my Authors@Google presentation I am doing in San Francisco, today.
Finally, here are the videos from my keynote speech at NPOX 2009 in Hilversum, courtesy of OMROEP, the Dutch broadcasting organization which invited me to speak about The End of Control, the People formerly known as Consumers and the Future of Broadcasting (Radio and TV), at their annual gathering and conference, NPOX. The PDF and slideshare stuff is here.
Finally, here is the video and audio version of my presentation at MidemNet 2009, in Cannes France. I put a ton of work into this presentation and, well, honestly... I think it's one of the best I have ever done on this topic. Hope you enjoy it - and please comment, below, and / or spread the word! Thanks to the Midem organization for providing the DVD with this video.
The topics: why the
music industry needs to license the Internet just like it has licensed
Radio (i.e. with a collective license), why criminalizing the users
& fans will not work - and why those efforts should be re-directed to the creation of a new 'Music 2.0' ecosystem that actually produces growing revenues,
where those new revenues will come from, and how the music flat rate -
aka music like water - would work. See my previous blog post for more details and the PDF of this presentation. The MidemNet blog is here. My free book, Music 2.0, is here, btw;)
Over the course of the next 5-6 years, the importance of getting Air-Play on terrestrial i.e. traditional, programmed radio will drastically decline, as people are switching to the Internet (and by extension, to each other) as the #1 way of sourcing music programs. We will see a drastic increase in fragmentation as people will do anything from carefully customizing each track in their lists to just listen to 'what's on' - and there will be 100s of permutations in between. From total engagement to total passive consumption, there will be offers covering each - and they will all be connected.
Because of the strong uptake in next generation mobile devices (fka cell phones), the explosive proliferation of social networks and the drastic increase in wireless broadband capabilities at ever decreasing costs (yes, not yet - but give it another 18 months) we will see people use their mobile devices as prime instruments of listening to radio-like music programs - there will be hundreds of radio/music apps available via the various app stores that each device maker AND operator will offer; some paid, most feels-like-free, some sponsored.
The other point is that as the car becomes fully connected and always-online people will shift their music consumption to Net-based offerings while on the road, as well (in addition to the already stiff in-car competition from iPods etc) - this will be a very very very serious challenge to traditional Radio (and TV) broadcasters. Local news, traffic, sports etc will be programmable to interlace with your Internet-based stations - the best of both worlds? Talk about Change!
“The logic is quite straightforward: You find a way of creating a
payment within the network,” says Gerd Leonhard, a media futurist and
author...Although a similar idea failed in France in 2006 amid a fierce
lobbying effort by the recording industry, Mr. Leonhard has long argued
that if the recording industry licensed Internet networks with a
flatrate for streaming and downloading music, then advertising and
other subsidies would be able to cover the entire CD business. He
doesn’t even think the Isle of Man’s tax is necessary.
“The payment of about €1 [$1.28] per week, which we have been
debating in Europe as a flat rate, is entirely possible to raise
through the ecosystem. The music won’t be free, but it will feel like
free,” he says, in an interview from Austria. Business models like Leonhard’s are becoming more feasible as concert
tours, merchandise, and endorsements become more lucrative than
recordings. “When Prince gives away his CD away with a British Sunday newspaper,
he knows that he will be guaranteed three sold-out shows. That is worth
more to him than the recording,” Leonhard says...."
Author and futurist Leonhard says the recording industry is fighting an
uphill battle: “The tactic of criminalizing users hasn’t produced any
money. The industry needs to look for compensation, not control.”
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