The price of freedom: Reinventing the online economy (RSA Journal July 2009)

I was delighted to be invited to make a contribution to the RSA Journal's July 2009 edition, the printed version of which was just send out I believe, and the online edition that just went up on their website.

The complete title of my piece is: "The price of freedom - reinventing the online economy: Gerd Leonhard explains why ‘free’ content can still pay in the long term" and I really enjoyed writing this for them.

Following my last presentation at the RSA, in April 2009, on 'The Future of Content and Creativity' I have had many good conversations about this topic. The audio track from this event is here, btw; and the video is embedded again, below. Enjoy. And RT;)

I definitely recommend that you check out the other great features in the Juy 09 RSA journal, as well, there's some great gems in there.

You can read the entire thing on the RSA page, so here is just an excerpt:

"Free information, free music, free content and free media have been the promises of the internet (r)evolution since the humble beginnings of the World Wide Web and the Netscape IPO on 9 August 1995. What started out as the cumbersome sharing of simple text, grainy images and seriously compressed MP3s via online bulletin boards has now spread out to every single segment of the content industry – and even into ‘meatspace’ (real-life) services such as car rentals. Without a doubt, ‘free’ has become the default expectation of the young web-empowered digital natives and now the older generations are jumping in, too.

On top of the already disruptive force of the good old computer-based Web1.0, we are witnessing a global shift to mobile internet – a WWW that is, finally, so easy to use that even my grandmother can do it. While five years ago, we needed a ‘real’ computer tethered to a bunch of wires to port ourselves to this other place called ‘online’ and partake in global content swapping, now we just need a simple smart phone and a basic data connection. With a single click of a button, we’re in business – or rather, in freeloading mode. 

As users, we love ‘free’; as creators, many of us have come to hate the very thought. When access is de facto ownership, how can we still sell copies of our creations? Will we be stuck playing gigs while our music circles the globe on social networks, or blogging (now: tweeting) our heart out without even a hint of real money coming our way?

Daunting as it may seem, we can no longer stick with the pillars of Content1.0, such as the so-called fixed mechanical rate that US music publishers are currently getting ‘per copy’ of a song ($0.091). Nobody knows what really defines a copy any longer when the web’s equivalent of a copy (the on-demand play of that song on digital networks) may be occurring hundreds of millions of times per day. No advertiser, no ISP and not even Google has this kind of money to pay the composer (or rather, the publisher), at least not until the advertisers start bringing at least 30–50 per cent of their global US$1 trillion marketing and advertising budgets to the table.

Traditional expectations and pre-internet licensing agreements are exactly what are holding up YouTube’s deals with the music rights organisations such as PRS and GEMA: this is what the rights organisations used to get paid for the music that is being copied, and this is what they want to get paid now. This impasse is causing significant friction in our media industries worldwide. Yet, below the top-line issue of money, there lurks an even more significant paradigm shift: the excruciating switch from a centralised system of domination and control to a new ecosystem based on open and collaborative models. This is the shift from monopolies and cartels to interconnected platforms where partnership and revenue sharing are standard procedures. In most countries, copyright law gives creators complete and unfettered control to say yes or no to the use of their work. Rights-holders have been able to rule the ecosystem and, accordingly, ‘my way or the highway’ has been the quintessential operating paradigm of most large content companies for the past 50 years.

Enter the internet: now the highway has become the road of choice for 95 per cent of the population, the attitude of increasing the price by playing hard to get is rendered utterly fruitless. Like it or not, a refusal to give permission for our content to be legally used because we just don’t like the terms (or the entity asking for a licence) will just be treated as ‘damage’ on the digital networks, and the traffic will simply route around it. The internet and its millions of clever ‘prosumers’, inventors and armies of collaborators will find a way to use our creations, anyway. Yes, we can sue Napster, Kazaa or The PirateBay and we can whack ever more moles as we go along. We can pay hundreds of millions of dollars to our lawyers and industry lobbyists – but none of this will help us to monetise what we create. The solution is not a clever legal move, and it’s not a technical trick (witness the disastrous use and now total demise of Digital Rights Management in digital music). The solution is in the creation of new business models and the adoption of a new economic logic that works for everyone; a logic that is based on collaboration, on co-engagement and on, dare we mention it, mutual trust – an ecosystem not an egosystem. Once we accept this, we can start to discover the tremendous possibilities that a networked content economy can bring to us.  

Free, feels-like-free and freemium

Much has been written on the persistent trend towards free content on the net. It is crucial that we distinguish between the different terms so that we can develop new revenue models around all of them. ‘Free’ means nobody gets paid in hard currency – content is given away in return for other considerations, such as a larger audience, viral marketing velocity or increased word of mouth (or mouse). I may be receiving payment in the form of attention, but that isn’t going to be very useful when it’s time to pay my rent or buy dinner for my kids. Free is... well, unpaid, in real-life terms.

 ‘Feels-like-free’, on the other hand, means that real money is being generated for the creators while their content is being consumed – but the user considers it free. The payment may be made (ie sponsored or facilitated) by a third party (such as Google’s recently launched free music offering in China, Top100.cn); it may be bundled (such as in Nokia’s innovative ‘Comes With Music’ offering, which bundles the music fee into the actual handsets) or the payment may be part of an existing social, technological or cultural infrastructure (such as cable TV or European broadcast licence fees) and therefore absorbed without much further thought. Feels-like-free could therefore be understood as a smart way to re-package what people will pay for, so that the pain of parting with their money is removed or somewhat lessened – everyone pays, somehow, but the consumption itself feels like a good deal...."     Read on.  PDF: Download RSA - The price of freedom Gerd Leonhard July 2009

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Told you so: eMail is now second to communicating via Social Networks

I just ran across some nice research from Nielsen called the Global Online Media Landscape - download their free PDF - (yes, I know, it's from April 2009... so I am a bit late to the party...sorry) shows that as of February 2009 the use of eMail is paralled by the use of social networks as far as the frequency of communication is concerned; so-called member communities and social networks are now an equally preferred method of conversation. This trend will continue and I predict that eMail will remain popular mostly for business communications but will otherwise decline drastically, within the next 3 years. I kind of pointed in this direction in a blog post in October 2008 "eMail is for old people'. Now just wait until the Google Wave hits!

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8 key trends and some foresights for the next 5 years

Every now and then I get tempted into actually formulating some fore-sights. This time, the preparations for my upcoming speech on "New Media Futures" at the RSA in London have egged me on to share a few key points with you:

1) We will soon see the emergence of many different kinds of iPhone-influenced Netbook-like devices; some will be Apple-made but most will not. These devices may be 2-3 times the size of an iPhone and will connect to the Internet in every conceivable way, i.e. 3G/4G, LTE, Wimax, Wifi etc.  They will be touchscreen, zoom-interface enabled, cloud-computing, speech-controlled, location-aware, mobile-money equipped, socially hyper-networked, always-everywhere-on, HD-camera equipped and possibly project images and audio or even support basic holography.

In addition to the high-end, fully-loaded and perhaps still rather expensive versions that many of us in the so-called developed countries will gobble up, low cost and more basic editions for the developing markets will be sold in the 100s of millions (think India, China, Indonesia...). These smart gadgets will have very low energy consumption and therefore extremely long battery life, may even sport basic solar-power options, and may ultimately cost less than 30 USD, or even be 'free' (why bother to sell the box if you can make a lot more $ with selling services.... Nokia?).

It is these mass-market yet very smart and networked devices, together with cheap or free wireless broadband that will really revolutionize reading, newspapers, books and education; not to mention our music, TV and film consumption habits. Content commerce will be completely redefined as a consequence. As BTO told us a loooong time ago: "You ain't seen nothin' yet"

2) Very cheap or free wireless broadband - at fairly high speeds, i.e. at least 2MB / sec - will be available in most places, particularly in the booming new economies of Asia, India, Russia and South-America, and a bit later, in Africa. Funded by the likes of Google and by the future 'telemedia' conglomerates, governments, cities and states, wireless broadband will probably reach 3-4 out of 5 people on the globe within 5-8 years. User-generated & derived content (UGDC for those of you that must have an acronym ;), virtual co-production, mobile editing and instant network sharing will explode by a factor of 1000, making control of distribution a very distant concept of the past. UGC or UGDC may make up to 50% of the global content consumption by 2015. Consumers will be (co)-creators, marketers, sellers and buyers, and come in a hundred variations, from totally passive to totally active. Then, indeed, filtering, culling and curation will be the key to success.

3) Collective blanket licenses that legalize and unlock legitimate access to basic content services via any digital network will emerge, and are likely to take over as the primary way of content consumption, around the world (but in Asia, first). Just like water or electricity which is readily available when moving into a new home, the basic access to content will be bundled into access to digital networks, i.e. via ISPs, operators, telecoms, portals etc. This shift is starting with music (as already done by TDC in Denmark, and Google in China), and will be quickly followed by films, TV, books and newspapers. Access may often - but in local variations - 'feel like free' to the user but will in fact generate 10s of Billions of $$ via blanket licensing fees (yes... those pools of money), next-generation advertising and branding, data-mining & sharing, up-selling, re-packaging and many other new generatives. This topic will, btw, be the gist of my RSA presentation tomorrow - if you can't be there in person, you may want to listen to the live audio, via this link.

I think that governments around the world will call for and / or support the implementation of collective content licenses that wil finally legalize content usage on the Internet, similar to how governments pushed for the radio and broadcasting licenses  approx. 100 years ago. Whether these blanket licenses will be voluntary or compulsory remains to be seen - in any case the only alternative is to perpetuate a severely dysfunctional telemedia ecosystem that criminalizes almost all users and stifles innovation while generating virtually zero new revenues for the creators.

4) Fuel-cells and other next-generation mobile energy sources are a certainty. A serious increase in mobile device power (and therefore, its use) will be achieved by employing next-generation technologies such as fuel cells that could provide for up to 500x the usage time that we have today. This is likely to become a reality in 3-5 years and will revolutionize how we use - and how much we rely on - our mobile devices, especially in countries where there the fixed-line power infrastructure is much less developed or non-existent.

5) Completely targeted and personalized advertising, delivered largely on totally customized mobile computing & communication devices, will turn the the $ 1 Trillion USD advertising and marketing services economy upside down. Behavioral targeting and user-controlled advertising will, of course, become an even hotter potato and a much discussed challenge, but the good old deal of 'I give you attention & personal data and you give me value e.g. content' will be even more pronounced on the Net. In fact, advertising as we knew it is already more or less outmoded and will, during the next 2-3 years, be completely reinvented. Privacy and Trust are the #1 issues here.

The implication is that if your data (within your specific sets of permissions and opt-ins)  is used to bring you perfectly synchronized advertising, than advertising really becomes more like content, too. Watch this play out in the mobile advertising space, starting this year, and quite possible boost the global value of advertising-content by more than 100% by 2015. Google will be the main driver here, plus Facebook, Nokia and yes... Twitter (soon to be = Google).

6) We will witness the more or less complete decline of most forms of physical media within 7-10 years. The very definition - and thus the core economic business models - of newspapers, magazines, CDs, DVDs and books will be completely re-written, and new forms of content packaging will rapidly emerge. We can already see a preview of how this may work in the current mobile applications boom: content as part of software packages; paying for the packaging, the curation, the bundling, the personalization - not just for the zeros and ones that are 'the copy'. This trend is important not just because it will reflect the users' (or better... followers') new consumption habits but also because because of the increasing need to save energy and material costs - and moving from content products to content services will certainly go a long way in this regard. The total decline of printing in people's homes, and for personal use, will commence, as well.

7) Paying for privacy will become a distinct option. Today we pay to go online and connect; in the future we may end up paying for the luxury to go offline, disconnect, enjoy the quiet, and give our brain some rest. Maybe if we don't want to share our click-trails and usage data, we will be able to make cash payments instead - and the more you pay, the more private you can be..?

8) Travel 2.0: alternatives to 'actually going there' will explode: immersive, 3D video, virtual rooms, holography. This is a key development that will nurture new forms of entrepreneurship, education and group working.

Please talk back!

Some Internet companies are becoming more like Public Utilities and integral parts of our Social Infrastructure

I have observed a recent trend that I want to share and get your feedback on: some Internet companies and platforms such as Google / Youtube, Facebook, Nokia, Slideshare and Twitter are becoming so important to many of us that we would be severely challenged if they went away or materially changed their services. This makes them both very powerful but also very vulnerable - for if we chose to no longer trust them, they would quickly face their demise. Some examples:

• Google already provides the digital toolbox and 'cloud computing' infrastructure for a 100s of Millions of people: free email, domain services, calendars, docs, widgets, blogging, videos, voice (soon!) - and of course: search and advertising services. Youtube has become the de-facto next-generation TV for a lot of people, already. My slightly futuristic view is that pretty soon Youtub

  

  e and the many other video sites (and of course the 100s yet unlicensed video download services) may start replacing Cable TV as the prime source of entertainment for a lot of digital natives. A fast net connection + AppleTv + Boxee + Miro ...pretty soon, that should do it!
• Facebook provides a key social platform that, for many users, has already substituted email or phone calls,

  

  and is well on the way of becoming a cyberspace 'home' for many of us, a digital meeting place and key part of our social lives. My prediction is that Facebook will become as important as Google - and they will reinvent advertising in the process, just like Google did.
• Nokia is heading in the same direction: Comes with Music is looking to provide a seamless, all-inclusive music experience

  

  that is build-in or shall we say hard-wired into our mobile lifes, Nokia's OVI is gearing up to compete as the preferred destination for sharing things, and their handsets i.e. mobile computers are well on the way of becoming remote controls for our lives.
• Flickr, Slideshare and Twitter - to a lesser degree, for now, compared to Google and Facebook - have become crucially important to Millions of people

  

  already (I can attest to that) because they are great platforms to share stuff; and shar

  

  ing seems to be what gets a lot of people excited - not a surprise but certainly an important realization.

A bit like the good old BBC, these companies may soon face a double duty and somewhat of a conundrum: 100s of Million of people have grown accustomed to using them, and their services have become so crucial that they have become not only valuable businesses but also public utilities that we are increasingly depending on. My feeling is that once a company has reached this position, its value is much higher than the actual revenues could ever warrant, since it's no longer just about monetary value but also the social capital they have accrued, and the corresponding TRUST that we put into them.  So this is, as a result, the most important mission for those companies that make it to this point: Earn and keep my trust, every single day, with everything you do. And then, I will keep paying attention to you, give you my data to use, send my friends to you. Don't mess with the terms of use without asking me (>Facebook), ask for permission to use my clickstreams and cookies (see Google's approach to behavioral targeting), and don't ask me for $ too early (see Twitter's yet to be defined revenue strategy).

Imagine an iPhone Netbook 2x the size - adios Kindle and Sony Reader. Publishers: get ready!

Thinking about the current Netbook craze I have a strong hunch that Apple may well jump in and roll out a new iPhone-inspired Netbook - let's call it the Apple iNet - that could be roughly 2-2.5 as large as an iPhone. A TOUCH-SCREEN device like this could easily become a major challenge to digital reading devices such as the Kindle (which I can't try here in Europe) and the Sony Reader (which I have but don't like a lot). I have found myself wanting an iPhone / iPod like device like this 100s of times already, especially while traveling.

If Apple does this - and I would certainly like that , let's just imagine:

• We could finally, really read offline web-pages, PDFs, slideshows, white-papers, non-fiction books etc on a nice, full-color touch screen, using next-gen versions of existing apps such as Instapaper ****, Soonr, Stanza, Bookshelf, EReader (in fact, this may be why the new Kindle app for the iPhone is crucial for Amazon!)
• We could review our RSS feeds much easier, including images and videos, using apps like Byline (my favorite) and Newsstand, or the Google Reader offline app (once they offer it)
• We could cache i.e. record video and audio streams and play them on our 'Apple iNet' device - and actually have a really nice viewing experience
• We could use the iNet device to do some simple image and video editing - but most likely this would be done 'in the cloud' not using local software

  Image via Wikipedia

A smart, Apple-style device like this (which may have similar elements to OLPC's XO2 but would not compete in the low price markets, naturally) would give a huge boost to the mobile content ecosystem - and it would also usher in an era of rampant and wide-spread electronic book sharing that would make music file sharing look like child's play.

Publishers: you may want to get ready for this sometime soon. My 2 cents: radically lower the prices for ebooks, start looking at bundles, subscriptions and flat rates, figure out how to monetize sharing with new advertising-supported models, gear up to provide added values all the time (value is around the content!!), start planning for those New Generatives - you've got another 12 months if you're lucky. Go!!

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How all content is going digital (Content Economy Trends): a new ecosystem is unfolding

These are some trends I have culled and then 'deducted' from my research over the past 3 months - if you have any better information or see errors here, please comment or ping me via Twitter. This certainly bodes well for anyone in the digital content ecosystem - we just need to get 'old' to 'new' now ;)

 

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The Future: Cars become Social Objects

Image via WikipediaIn my work on the future of media, technology and content I often run across related areas such as tourism, banking, energy and transportation; and I have recently ventured into some of those sectors, as well (in particular, tourism - more on that, soon).

So here is a short burst I want to share from the world of transportation:  I think the Cars of the Future will become more like Social Objects. Of course, this will vary drastically from country to country (and cultures) but I think that an increasingly large percentage of cars will cease to be owned, maintained, paid and used by one party only. Instead, groups of people will have fractional ownership (as the brilliant Kevin Kelly calls it), i.e. use, share or access the car when and where they need it, and thereby using motor vehicles much more efficiently.

This will be true for plain-old functional cars ('just get me from A to B') as well as for fun, sports and other special-purpose cars. The obvious advantage of enormous cost and energy savings will make this concept pretty much irresistible - the only thing that keeps most of us from doing this now, already, is our reliance on the car as a status symbol and (indeed) as some weird guarantor of 'personal freedom' (yes...I am guilty, too). I believe that this will turn around within the next 3-5 years: if you DO own a car, just for yourself and your own enjoyment, people may well consider you hopelessly old-fashioned; and not much admiration will come your way any longer.

I also reckon that within the next 2-3 years many Europeans will not really enjoy individual driving that much any more, with lower and lower speed limits becoming a constant headache, mega-traffic jams and congestion charges and significantly increased chances of delays. This will lead to a much increased demand for high-quality public and semi-public (i.e. first and luxury class) transportation, which will be even further boosted by the fact that people will of course be fully connected anywhere and anytime they travel  - and since they won't be busy driving they can take full advantage of this.

We will see steep increases in car-sharing services of all kinds (e.g. Zipcar in the U.S.), and the concept of self-driving electric cars will probably become a reality much sooner than we think - just click the icon on your mobile and the next available car will show up on your doorstep; hop-in and be driven to your destination without lifting a finger.

Driving yourself will increasingly become an exception rather than the default. Talk about change: 100s of Billions of $$, and Trillions of brain-cycles freed up. Think about what we can do with all that time we used to spend on driving. Tele-learning, networking, co-creation, crowdsourcing...  here we come!

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2009 predictions and trends: sharing some good links

Image by gleonhard via Flickr

I am using Twitter to share links pretty much on a daily basis. However, if you are not (yet) into Twitter and just want to follow what I write in my blog posts, here are a few links that I think are worth sharing as we move into the new year:

Steve Rosenbaum at AO: 2009 - 5 Trends That Will Change Media | AlwaysOn. Great stuff in here, and I like his summary:  "2009 will be a year of gut wrenching,  dramatic, roller-coast change. Big things will get smaller, or die.  Little things will survive and start to grow. Consumers will become creators.  Lurkers will become participants.  The volume of voices will expand exponentially  -  and the need for clarity and trusted filters will go from being useful to being essential.  Just as MP3s turned the music industry on its ear, and Craigs List turned newspapers upside-down,  the emergence of personal publishing and new forms of both trusted and Community Curation will have an immediate and long-lasting impact on media, commerce,  community and politics"

More gloomy but still with a dash of hope: EMarketer on Advertising Trends in 2009 (see some of their stats below)

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eMarketer's Predictions for 2009 (good read & think)

Image by gleonhard via Flickr

As usual, some good stats and trends here: eMarketer's Predictions for 2009 - eMarketer. Most of it is good news, I think.

The nuggets:

• Video ad spending will run counter to overall economic developments, rising by 45% in 2009 to reach $850 million
• Search marketing spending will grow by 14.9% in 2009, to $12.3 billion. Search marketing is not recession-proof, but it is recession-resistant.
• Total US Internet ad spending will increase to $25.7 billion in 2009, an 8.9% growth rate.
• Online retail sales (excluding travel) will grow by only 4% in 2009—the first full year to feel the impact of the economic crisis.
• E-commerce will be a growing revenue stream for social network sites. Expect both MySpace and Facebook to enhance their self-serve advertising systems to allow consumers and businesses to buy and sell real-world goods and services.
• Traditional Media: Continues Hurting: Newspaper advertising will continue to decline in the new year more than any other medium. Industry-wide cutbacks will continue, and there will be some consolidation.
• The 800-lb. online video gorilla, YouTube, announced in Q4 2008 that it would carry full-length television programs supported by ads. Expect to see similar properties compete with it in 2009.

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A key trend for 2009: Conversation Enablement

Image by gleonhard via Flickr

A recent blog post by Seth Godin got me thinking about the power of Conversation Enablement and the idea of Social Books. Seth wrote about his vision of a conversation-enabled Amazon Kindle, egging me on to contemplate this: isn't Conversation Enablement something that already drives a lot of the most successful ideas, services and platforms, and isn't this very likely to explode in a financially-ultra-tight 2009:

• Twitter is really all about enabling a constant river (well... ocean, really) of conversation. The driving force is not really the linked-to information but the Context, and the Conversation that ensues as a consequence
• The iPod touch and maybe even the new Zune (and other connected music devices) are all about enabling conversations - they connect us to the content, but also to each other. Some people would argue that the each-other component is the part that will soon generate more revenues than the content, itself ;)
• The most successful mobile apps (Pandora and Last.fm for music, the NYT and AP mobile apps, Facebook, Google reader, Loopt) etc are also heavily into enabling conversation around the content
• Almost ALL of the companies that had huge growth in 2008 were based on conversation enablement: Youtube, Facebook, Last.fm, Twitter, Skype (see Mary Meeker's chart, below)

Something to be learned here, for 2009!  Source of image: Morgan Stanley Internet Trends 2008

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4 reasons why we will start printing a lot less in 2009, plus: mobile reading is here!

Remember when we thought that the Internet was going to bring us the paperless office, and a 'greener' new world that would not rely on printed information at all times? This has not really happened yet but in 2009 this concept may finally become a reality for many of us. Looking around at what me and many of those clued-in people in my network do, I see the following trends:

1) Offline web-page and article reading. A lot of people will start reading their web-pages, RSS feeds and blog posts via new offline reading apps such as Instapaper (which I really love - check out their blog, here, *iPhone only), Read-it-later (very cool FF plug-in, just started using it, seems promising), the ubiquitous Google Reader (works on most mobile devices, and syncs great offline, too; with the amazing Google Gears engine), Opera Mini on my new E71 (supposedly offers offline reading), and many other cool apps that are becoming available for mobile devices (those small shiny boxes we used to call notebooks & computers;) right now.

Remember when we all had to print those top stories from all those feeds and sites we like so that we could read them on the plane, or in the train or taxi?  Well... no more. On my end, I used to print 100+ pages per day (yes, sorry), and that's gone down to less than 10 now; thanks to Instapaper etc. Great!

2) Mobile apps courtesy of your favorite newspapers and magazines. If you are into reading those good old mass media newspapers and mags (no worries, I am, too!) now you can make use of some nice new apps that allow you to read them on your mobile phones. Sure, it feels different, it's rather smallish and obviously lacks the physical paper user experience, but it works well; it's free and first of all it's always there. Right now, mobile newspapers apps are available mostly for the iPhone - but this is changing very quickly.

I reckon that within 6-9 months we will see these apps become available for almost every mobile platform and OS, since this added value is indeed a major reason to buy a new smart-phone. Right now, my favorite is the New York Times app for the iPhone - it's well done, easy to use, does not crash, and gives me almost everything I need from the NYT (apart from that good old paper feel and smell;). I also like the AP news app (iPhone and blackberry)

So say goodbye to buying a 3-day old NYT at some airport shop in Europe and stuffing it into my briefcase along with my blog post print-outs (see above) - another nice time-saver, waste reducer, and minor money-saving accomplishment. And what's best for the NYT: I keep paying attention to them, and I won't be surprised if they ran customized ads on their apps, soon, too. Plus: I still buy the 'real' dead-tree NYT if I want to enjoy a more leisurely read. They've kept me as user, and that's what counts.

3) Reading entire books on your mobile device. Again, the iPhone dominates in this turf right now, as well, but this will change quickly. Wired has a good wiki on iPhone reading apps, btw. I don't use a lot of these apps yet, mostly because many of these services use bizarre copy protection schemes for their fairly limited range of eBooks, they don't have the books I want to read, and the publishers charge prices that will make you wonder if they want to punish you for trying out eBooks (hey - sorry, I thought that it's actually a lot cheaper not having to print and not having to ship anything - guess I was wrong). The leading apps include bookshelf, stanza (which I have), ereader, feedbooks etc - here is a good list. Again, for me, reading entire books - rather than just essays, PDFs, blog posts or articles - on my mobile devices i.e. cell phones is still a very tough interface challenge; therefore I prefer to buy the print edition and haul it around (especially if the eBook price is still very much the same) - but my hunch is that this will change in 2009, too. Maybe not for fiction, though - but for business books I can imagine it.

4) The coming boom in electronic readers such as the Kindle and, maybe, the new Sony Reader  (the PS700 BC) which I just bought but have not received yet. It does sound very promising since you can read PDFs with it, bookmark paragraphs or pages and keep it running for weeks at a time.The Kindle is, sadly, not available here in Europe (due to mobile network issues I would think), so I haven't tried it, but I keep hearing good things about it; apart from people complaining about its design. The best comment on the Kindle is probably from Seth Godin, here (Seth delivers some great comments on ebook pricing, and 'books as social objects'), and which was summarized in my blog, here.

Summary and 2009 predictions:

• Many of us will print a lot less, next year - and that's already a great step
• Most manufacturers of smart phones and mobile computing devices will get seriously into supporting or integrating all kinds of reading apps (web-page / offline, pdfs, feeds, newspaper apps, book apps), and will therefore also beef up their UIs, as well. And we will use them! Next step: Google.edu?
• The next generations of eReaders will actually be usable for more than just a few of us - another 2 years and they will become mainstream.
• A $ 92 Billion industry (ink, printers, paper etc) will probably shrink as a consequence.Talk about disruption!

Printer manufacturers and ink suppliers will start to feel the squeeze in 2009; people will still buy printers, of course, but probably a lot less ink, and much less paper. And, shrinking profits aside, I think that's a good thing.

Now, what this will do to the publishing business... another story, another post!

Note: related to this, check out Malcom Gladwell's 2002 New Yorker essay on 'the social life of paper'

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  Another 2 years and we'll have a viable Google competitor.

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2015 Predictions: Social Shopping

I found this very interesting chart on Shopping Innovations on KenRadio.com (I think). Imagine shopping via / on your favorite social network, people i.e. users collaborating to produce new products... and holographic sales assistants.

Speaking of holography, yes... it's real.Check out this video, below (Cisco):

Future Stories #1: Blogs will be Record Labels, and Bloggers will be the new Music Moguls. BlogJs anyone?

Download this story

Within 2 years, the leading music blogs will become what used to be called 'Record Labels'. The people running them will be those sharp, tuned-in, hyper-networked and resourceful BlogJs formerly known as bloggers. They will use their blogs as the primary attention channel (yes - attention really is the new distribution) and will dish up a complete, interactive and highly relevant multi-media experience that will include TV shows, chats, webcasts and games. Forget about 'websites' and browsers - the BlogJs will do it on all platforms and devices.

The future  brings 1000s of micro-music-channels that will literally broadcast - or rather, 'narrow-cast' their longtailing creations - be it text, audio, images or videos - to their hungry subscribers using MediaRSS feeds and customized my-stuff-pages such as [fiction alert] imoogli, beatwibes amd muflakes that will 'live' on any connected device, e.g. your mobile, your TV, your computer, your interactive bathroom screen, your wrist watch, your wimax-ing car radio, or your new P2P global gaming network. Widgets will continue to become instant, ubiquitous mini-site modules that will allow anyone to re-distribute any kind of content, to any device and any platform, anywhere. Most marketing will be done through and with the users - and some of them will get paid for it, too.

BlogJs will attract an influential, engaged and proactive audience by flouting their charismatic personalities - indeed, these disruptors, thought leaders and influencers will be our future broadcasters. Like digital-age  editions of 'analog' radio personalities such as the BBC’s John Peel (rip), these BlogJs will lead the way in matters of coolness, style, technology, gadgets, trends, politics, fashion and games, using new platforms like [fiction alert] Muserati, Digggster, Musicious, Lovenotion, MyDace and many others. And yes, many of them will be from China, India, Russia, Brazil, Indonesia or Mozambique. Goodbye anglo-centric blogoshere...

Social Networks are the new Broadcasters

...and they will broadcast to (and from!) those always-on, always-within-reach and utterly personalized mobile devices fka mobile phones, not just to or from computers. Blogs will amalgamate with, and integrate into social networks. Personal publishing will evolve to include entire ‘me-casting’ toolboxes. My taste, my list, my ears, my audience, my artists, my network i.e.... you guessed, it, my record label. Another 9-12 months and we will have the the first BlogJ signing the first hot new artist to a agency-type agreement.

Music blogs will explode with the advent of the new music fat rate. Sites like [fiction alert]  Quadrogum will rule, and blog aggregators like UeberFeed will become the next Infiniti Radio. Widgets will become as common as email (which will fade away). Hundreds of niche-obsessed BlogJs will emerge, becoming trusted opinion leaders that will draw 10s if not 100s of 1000s of networked music fans  that will discover new music this way - strictly by lifestyle i.e. genre and sub-sub-sub-sub genre. Much like it used to be in music-television; coolness and credibility will rule here.   (photo above from flickr.com/lynetter)

Those former MP3 pirates and stream-rippers are the new Clive Davis’s and Ahmet Erteguns - they have the ears for the new artists and a direct pipeline (read: feed) to perfectly matched audiences, around the globe.

BlogJs will open clubs and spaces where their 'readers' can meet, both in RL (Real Life) as well as virtually. Think [fiction alert] HypdaBar. The [fiction alert]  nipho9-5 (see box on left) will be their weapon of choice, fully loaded with a 20 mega-pixel camera and HD Video recorder, quadrophonic real-time sound remixer, 10+ ways of always-on connectivity, 2.5 terrabyte of flash storage, and a build-in image projector.

Once flat-rate music offerings become the standard...
- and they will, without a doubt (see more details here) i.e. by early 2009 - music-based blogging will be unleashed in a major way and stands to become very powerful very quickly - everyone is going to want a piece of that hot new BlogJ. This is when we will see blogs become record labels and music publishers (albeit with an altogether different operating paradigm), filling the gaping void that has been left by the dinosauric and hopelessly control-obsessed major labels, those large indie label chiefs  that still hope to become major label bosses themselves before the money dries up, short-sighted and technologically hyper-challenged managers, and eerily self-outmoding public broadcasters.

In less than 2 years from now, ubiquitous and fully legal yet 'feels like free' music offerings will bring us music bloggers that will become bigger than the biggest radio DJs we’ve ever had. And just like a lot of successful radio personalities before them they will move on to become A&R people and label owners, too. The difference is, of course, that they will have powerful, direct, zero - friction distribution channels at their disposal, and a loyal global audience, built-in and ready to go. All they have to do is keep on earning and retaining the attention of their users. 

Look for those new BlogJ’s to attract highly-targeted and 'loaded' advertisers, steered by forward-looking major-brand CMOs and next-generation creative agencies such as TribalDDB or Droga5. These ads will pay as much as $5 per click-thru (CPT), with major brands ‘sponsoring’ music blogs that fit their exact brand vision.

Once the bizarrely overdue and tired issue of 'how to legally provide streams and downloads of any song I choose' is solved, so that a BlogJ can finally use music just like a radio station uses music (i.e. powered by a collective voluntary blanket license), music blogs will explode and quickly increase their reach beyond the current blogosphere inhabitants and netizens, beyond the computer, and most importantly beyond the web browser.

Imagine a blog that streams a personalized radio channel via a mobile application that sits within your favorite social network - this is the next radio! Whether or rather how you will get to keep the music will not be relevant any longer - what matters is the selection, the endorsement, the context, the relevance. No longer are we going to be hungry for just any music provided that it's free, now we are hungry for relevance. So, here is some advise for the last few incumbent record labels of today:

• Dive into music blogging, NOW - either start your own or engage with existing ones...
• Build a global network of bloggers that you can 'feed' with your music. Engage, talk, learn...
• Get ready to invest time & money in the top blogs
• Look at bloggers as your next A&R people

Soon, a music-RSS feed from the leading goa-pop guru can be just as valuable as those hip shows programmed by Nick Harcourt at KCRW or by Stephen Hill at Hearts of Space (and theirs will be even more renowned).

Once broadcasting is legally and officially delivering music and the myriad of bizarre licensing problems fall by the wayside, bloggers will quickly morph into record labels. Artists will 'sign' with them to get their official approval which will mean instant notoriety in your target audience.

Blogs are...Labels.

When: 18 months
Where: everywhere (but EU, Asia and BRIC countries first because there are much less legal issues around so-called mechanical copies)
Impact level (from 1-10): 4
Opportunity rating (from 1-10): 9

Download the pdf: blogs_will_be_record_labels.pdf

Check out my new book, Music2.0 here (includes paywhatyouwant PDF download) or on Amazon

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Update: I just saw a very good comment on this by post, by AkiraTheDon so I thought I would share it - kinda proves the point!   He says

"... its worth it. Anyway. I pretty much agree - a lot of what dude’s saying is already happening. I, for example get 97% of my hip-hop music from a handful of blogsites, like Nah Right and 2 Dope Boyz, that serve me brand new music almost hourly. Its been like that for a while now. I don’t buy any music magazines anymore cos they pretty much all suck ass. Reviews are more often than not written by people who haven’t even listened to the record, with a rating ascribed by the editor based on either: how much they wanna bang the PR involved, what marketing have told them to do, how much they had to drink last night. Having someone go, “this is dope, listen to it here” is obviously the way to go.."

PS: I guess that makes me a 'dude'?

A good chance for a Songwriters Strike in 2008?

I think that Songwriters and Composers may very well go on Strike in 2008.

Why?

I have been watching the writers strike in Hollywood with great interest. To me, this is another great example of how the new transparency of information and the explosion in user-propelled media has empowered the 'Creatives' to realize that they are where it all starts. They chose to finally make their demands, regardless of the 'you'll never work in this town again's, and to go up against a closed and outmoded system that has left them little control over their fate, so far.

But here is the thing that's rattling my cage: I think it's basically the same situation for songwriters and composers.

Traditionally, they have put their fate into the hands of publishers who in return have put their lots into rights organizations and societies, so called PROs (Performing Rights Organizations) and MROs (Music Rights Organizations). That all worked okay - some would say - until the Internet came around (darn you Vince Cerf) but the result is a seriously monopolistic system in which a writer does not have a lot of choices over if, how, when and for what his / her music is licensed; unless they are at the top of the heap it's take it or leave it.

In Europe, all writers must be a member of a society such as GEMA, SACEM, BUMA, SUISA etc, in order to collect any public performance royalties, and this is an exclusive relationship (yes, really). You're either in or you're out (and I am out now, btw, meaning no longer a member of GEMA), and if you don't like their licensing policies or their retroactive approach to the Internet that's just too bad.

But after 10 years of watching these copyright functionaries fighting the Internet and all technology-driven changes every single step of the way, it is painfully obvious that the rights societies and most industry bodies (such as the NMPA, CISAC, MPA etc) have still not seen it fit to get on with it and actually come up with a realistic business model for licensing all those new ways of using music on the Internet (see the latest disaster with Pandora, in the UK).  In other words, they are still humming and puffing, and falling all over themselves with legacy issues and internal paradigm-clashing - and thereby effectively disconnecting the writers and composers from the flow of new money that comes from the web.

Instead of offering workable solutions in some sort of timely fashion, most of these organizations (well, okay, there are some exceptions, such as SOCAN in Canada, and to some degree the American societies, namely BMI) have become (in)famous for NOT LICENSING anything that does not fit their existing schemes, which, needless to say, are as aged as a nice bottle of red wine. Just ask anyone that is in the Internet business and they will tell you stories that will make your hair stand up ('how dare you want to use our music!"). Talk about not serving the market! Only monopolies can get away with that (remember when the telephone company was in that position... ouch, never again).

And of course, I grant them, they have tried (some of them), there are reasons, there are real hurdles, there are semi-valid excuses, there are 100s of ways of explaining WHY this is still a problem - but the bottom line is that songwriters and composers are STILL not getting paid for the use of their music on the Internet, to a very large extent.

No, not because those new web companies don't want to pay (they do). Not because there is no money in revenue sharing or advertising or UGC (there is). Not because on the Net everyone wants it all for free (they don't).

No, just because most of the publishers and the rights organizations (i.e. the intermediaries in-control) still aren't ready! They have taken forever to address these issues, they don't want to rock the boat and challenge their golfing buddies at the record labels - and because ultimately their top interest is in keeping the status-quo, not in creating a new system that would be beneficial primarily for the CREATORS and the USERS.  These guys are neither evil nor stupid - but it seems they just won't move until the heat comes on.

And so, heat we may get this year, I think. 

Songwriters around the world (take a look at Canada, for instant) are starting to get seriously ticked-off at the lack of revenues from the internet-based usage of their work (do you see the parallel to the writers strike now?). And they are tired of the excuses they get from their publishers and rights organizations. And they hear about the 100s of Millions of $$$ made from advertising revenue shares that they'll never get. And they watch 100s of video sharing sites sync their music to video. And Billions of people listening to their songs on social networks, for free - because there is no standard license.

I think there is a good chance they'll get smart and look towards the real holdup here: their own representatives, the ancient system of how things used to work.

It's up to the Publishers and their Rights Organizations to preempt this development, i.e. to license the use of music on the Internet now, here, today.

Or you may just have a mutiny: no new songs written until the question of remuneration is solved. Until a new blanket license is in effect that allows every internet portal, every telco, every ISP, every web broadcaster, every social network to use my music and share the revenues with me (hey - does that sound like Radio?). Until my representatives deliver value, and until they give both me and the users (aka fans) and the 'people formerly known as consumers' want we need.

The problem is not the users and the companies that serve them - the problem is within.