Access to music - i.e. a simple click-to-play, anywhere, anytime, anything - is replacing ownership. This trend will quickly accelerate due to the massive global build-up in cheap wireless broadband connectivity, leading us swiftly to the point where listening to a song will be exactly the same as downloading it (at least in practical terms, from the users' perspective). Some of us would argue that this is already the case, of course, but in terms of mass-scale user adoption I would say we are about 18 months away from the pivot point in the so-called developing countries.
The music industry needs to urgently get ready for this: sell access not (just) copies. Bundle. Package. Develop those new generatives. "When copies are free you need to sell things that can't be copied" (Kevin Kelly, The Technium).
Another important trend to embrace is the move to mobile devices that will pretty much replace the computer as primary access point to the Internet i.e. to all digital content. Mobile applications for smart-phones will take the place of sound-carriers; music will be sold as/in/via/with software. Read how Pandora is doing this, in the U.S.
Very soon, a majority of people around the world will no longer connect to the Internet via desktop computers tethered to cables, or notebooks 'tethered' to WLAN boxes. Instead they will use their mobile devices (fka 'phones'). These experiences will be personalized, custom-made, location-aware, timely, interdependent, social, contextual and most importantly, 100% under the users' control.
In many developing countries, the first browsing experiences will be via mobile applications or mobile browsers. This is a huge shift for marketers, brands, content owners and ecommerce companies. Check out my recent presentations on Mobile Marketing and Mobile Content (both were held @ CommunicAsia 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
As you may have guessed from my travel schedule (see sidebar) I get a constant stream of new people and companies, conference organizers, existing clients and all kinds of organizations that want me to go somewhere and make a presentation, hold a keynote speech or run a think-tank event; from all over the world, and on many different topics. If I actually accepted each invitation I am quite certain I could literally travel from one speaking engagement to the next, for pretty much the entire year. That would certainly get me Red Carpet status with most of the 8 airlines that I usually travel with, I guess.
There have always been a good many logistical challenges in organizing think-tanks and other events; however, the current financial crisis has definitely resulted in much tighter budgets, pretty much everywhere. Increasing concerns for the environment are also palpable - making countless long-distance trips for the sole purpose of a 90-minute speech and subsequent panel discussion is probably not the best example for the efficient use of energy.
Therefore I have been busy exploring new ways how I can present to - and have real conversations with - interested clients from anywhere on the globe without continuously enriching the likes of Lufthansa, Swiss and Singapore Airlines. Again, I do believe that nothing beats the live performance, the face-to-face meetings and the actual experience in what people have started to call the 'meat-space' (as opposed to cyber-space I guess), but maybe some new ways can be explored that offer a similar, and less costly experience.
I recently found a very interesting platform in the new Present.io offering (a new service by Drop.io), which (for anyone with a browser and good Internet access, no additional software is needed) allows for remote presenting, commenting and chats, as well as sporting integrated conference calling, too; all in-one place, and for free. Well, at least for the basic version - they are banking on the Feels-Like-Free / Freemiummodel, too, and it's working with me already. Good stuff.
The combination of services like Present.io with a live phone call, or Skype / iChat Video, has worked out really well, already, and so going forward, I will start to accept more requests for virtual / remote presentations (some people use the term 'webinars' btw).
I look forward to experimenting with you on what the best formats for this may be; if you have any other ideas for better technical solutions please use the comment box or below or contact me via Twitter or eMail; the same goes for anyone interested in booking a virtual presentation.
Lastly, here is an example of the Present.io / Drop.io widgets:
Remember when we (meaning those of us 40+ years old) had those red moleskin diaries and notebooks with the names, addresses and phone numbers of all our friends and other contacts? Remember when we had those impressive Rolodexes on our desks, with thousands of business cards in them? When 'having a huge Rolodex' meant having a lot of power? When we painstakingly scanned those 1000s of business cards we garnered at conferences and tradeshows so that we could load them into our databases, or maybe add them to our eMail news list? Remember when we had those crucially important mobile phone numbers in our phone's memory (or on the SIM card) only? When Outlook had all our email contacts? When having a computer hard-disc crash or a stolen machine meant that many of our contact details were lost forever because we were always sloppy with our back-ups?
Well, no more: all of this is quickly becoming the past, for these reasons:
Everyone that I meet face-to-face is sooner or later added to at least one of my social networks (that is, if I actually enjoyed meeting them, of course), freeing me from the onerous task of having to manually keep track how exactly I met them. For me, LinkedIn has in effect become my electronic rolodex, and finding, retrieving and filtering people has become very simple. I constantly use LinkedIn to keep track of people that I have met, and to re-connect with them as needed - and I keep LinkedIn pretty much reserved for people I have met in the 'meat-space' rather than just online. The bottom line is that just like GMail has greatly simplified searching through your emails, LinkedIn, Twitter and Facebook are simplifying my people search; by far beating the traditional methods of keeping my contacts up-to-date.
Everyone that emails me (or vice versa) is saved in my gMail contacts list - all I need to do is search (and yes, I do export my contact list regularly). Why would I export lists of addresses if I can always search for them? Why do I need Plaxo or iContact if I have GMail plus my social networks (and now, realtime search and Friendfeed streams?
Twitter, Friendfeed and Facebook keep very good track of my current conversations and make it easy to see my most active network members, so if I need to find someone I can certainly do it here very quickly
Google private bookmarking tools and Yahoo's Delicious (which I keep public) make it very easy to bookmark and annotate people that are relevant to me, for later retrieval. I do this with 1000s of people I have met - I quickly bookmark your profile and add a few keywords, and even if I totally forget about anyone I will still be able to find them 5 years from now.
Apple's slick MobileMe keeps track of my datebook, my contacts and my files; and on all my Macs and iPhones and iPods
So are we becoming dependent on these new contact platforms? I guess so - but maybe it's better than looking stuff up the way we used to, anyway...? You tell me.
The Net Generation (some call them the digital natives) is indeed drastically different than the TV Generation - see my bullets below. There is no way anyone can sell or market to them in the same way that still worked (well...somewhat) only 5 years ago. There is no way anyone can still monopolize their attention in the same way that mass media (TV, Radio, Print) did until now (sorry, IFPI and MPAA;). There is no way that anyone can 'own' or 'control the customer' any longer, period. The more you try to control your users, the less you will receive from them.
It's the End of Control and the beginning of Trust. If you want to know more - well, yes, you remember, I did write half a book on this in 2008, and it's still quite accurate, so check out the End of Control chapters (free PDFs, too), here. And please 'pay' for the book by spreading the word - use the sharing tools provided below. Thanks!
When ads become so targeted, personalized, contextual, location-based, meaningful and relevant that I will want to see them (or at least not try to avoid them), then we are getting somewhere. I think that "Advertising IS Content" will be the key to web-native (and therefore mobile-native) advertising and marketing - all else will fall short of getting great results. I wrote about this in June 2008, here, and in yesterday's presentation at CMMA 2009 (the future of mobile marketing).
Some nice examples that are heading in this direction are the BMWZ4 Paint by Powerslide iphone application (a great example for branded apps), Jeep's 'have fun out there' campaign, and Apple's 'second opinion' commercial on the NYT website (thanks to Frank at MediaArts in LA, btw). What we really need is cutting-edge creative work that is based on a complete and real-time understanding of how people are starting to mix real-life experiences, the web, mobile and social media.
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!
It feels like things are moving increasingly fast now - the global economic crisis has either really catalyzed people and companies into action, or it has completely paralyzed them; but there is no way to stay neutral. On my end, I am certainly seeing a lot more demand for the development of immediate (2-3 years) future scenarios than ever before - guess that's a good thing!
A new kind of currency is developing, and it's based on how connected, appreciated, vetted & verified and available you are. This can be expressed in a myriad of ways, including via the number of links that you are getting, the amount of followers and retweets you are getting (however superficial that may seem, at this early stage), the number of people that subscribe to your blog feed, and if you run a network, how many companies are building your business on-top of yours (i.e. via the use of APIs). Of course, beyond that rather primitive approach of pure volume and easily trackable stats lurks the much tougher question of real meaning, context, merit and quality, i.e. it is really the quality of every single node in your network is what matters, not just their sheer number.
While this Link Economy (see Jeff Jarvis) is, of course, not new, it is certainly getting a real boost from the likes of Twitter and Friendfeed where it appears that good links do matter a lot, and some Twitter search results now often trump good old Google search results. This "you are what you share" mantra is, of course, just one expression of the Web'whatever.0' principle of "success is the result of adding value not extracting value"; and clearly those that add the most value now get the most mentions i.e. links or retweets etc.
If this feels a bit like some kind of race to you I can definitely sympathise but would venture to say that we will see the normalization of this process within the next 9-12 months, just like we did with SEO which is now a pretty well-established routine and feels less like a constant race.
Another important point has been raised by Umair Hague several times in the last few months (and yes, I have been busy applying the 'Proudly Found Elsewhere' principles to his blog posts;), and that is the fact that we seem to be moving into an Interdependent Ecosystem, and away from what I like call the traditional EGOsystem.
In the Content & Media and TIME sectors it will simply no longer work to focus on driving revenues and profits just for oneself, and based only on one's own assets and capabilities. Instead, in the future, revenue streams will need to be discovered, invented, generated, nurtured and maintained in collaboration with other key players in the Ecosystem. This is a key point for me: we won't have recurring and scalable new generatives in the content business unless we all help to build them, in the first place. There IS no model we can apply, yet, there is no set way to cook this dish, there are no charts to play off - t
Video: The Future of Content & Telecoms: Flat Rate Content Bundles and Social Media (Gerd Leonhard) via the eComm blog. Note that eComm Europe was just announced, as well (Oct 28-30, in Amsterdam).
Summary of topics:
" Imagine a world where unfiltered and limitless access to content is
bundled directly into your access to the networks. A world where 'your
cloud' holds all kinds of content, your social network connections,
your community, and your context (i.e. meta-content), your meta-data
and your interaction-trails, and where access to all of this is
feels-like-free, legal, always-on and fully mobile, on any and all
platforms. This is the future we are heading into, and telecoms,
content-owners and brands / advertisers must forge entirely new
partnerships. We are starting to see content creators and
rights-owners aborting their long-standing quests for total control,
and instead looking to build their audiences and share revenues. So
where is this trend going to take us, what do we need to do in order to
turn content (music, video, TV, news, games, books...) into a new and
truly growing business that is really web-native, where are the
big opportunities for telecoms, operators, social networks and
rights-holders, and what will the new business models look like? In
this context, Gerd will also address topics such as the flat rate for
digital music, ISP/Operator + Content bundling examples in Europe and
Asia, copyright 2.0 and the future of content commerce, the shift from
control-economy to attention & trust economy, the latest
developments in next generation advertising, and the growing economic
power of those 'new generatives' (> Kevin Kelly)..."
As the web becomes ubiquitous, everywhere, and mobile access dwarfs computers, we are seeing a key shift in the way that people use (fka consume) content. While it used to be good enough to present high-quality and professional content (think traditional TV, Radio etc) now people aka USERS want and really value good CONTEXT, too, i.e. links, recommendations, ratings, comments... and the conversation around the content. Social media brings this into sharp focus: all the stuff around content (I like to call this meta-content) is now just as important as the content itself. This has significant impact on every player in the content industries. Download the MP4 file: Download Content to Context shift MP4 (35MB)
I have run across the sponsored conversations concept via Josh Bernoff and via Techdirt's Mike Masnick before (see Techdirt's sponsored conversation example here), and found it very interesting yet a little hard to align with a more 'seriously independent' blogging approach. I am not sure that I would personally want to engage in having my blog or my tweets sponsored by someone that wants to reach my readers or 'followers' (and yes... there have been offers), but I still like the concept and will investigate it further. It seems like there is a nice package to be made with good old Word of Mouth, web-native Word of Mouse, and Sponsored Conversation - or what do you think?
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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. ![Reblog this post [with Zemanta]](http://img.zemanta.com/reblog_e.png?x-id=7d8e6328-1d47-418b-bd32-757aa729f7ee)
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