music2 gerd leonhard on the next generation of the music business

Gerd Leonhard, Digital Music Entrepreneur & ‘Music & Media Futurist’

www.mediafuturist.com www.gerdpresents.com

CEO, www.sonific.com

The Future of Music &

Music Like Watergerd@musicfuturist.com

www.gerdleonhard.net (blog)

Gerd Leonhard, Music & Media Futurist www.mediafuturist.com

Today, 2 things:

1. Digital music distribution is

out of control - and that will

be a very good thing for all

of us!

2. ‘Music like Water’ will make

all of us a lot more money

than “Music on Plastic”

Gerd Leonhard Music & Media Futurist www.mediafuturist.com

New technologies usually disrupt severely but always make the market bigger

Big technology changes always take longer than we think, but then whe they do happen, they happen

much bigger than anyone expected... and that time is NOW.2007 is a year of drastic changes.

Gerd Leonhard, Music & Media Futurist www.mediafuturist.com

THIS is the end of controllingdistribution - and the beginning of a new boom!

Gerd Leonhard, Music & Media Futurist www.mediafuturist.com

Controlling music is an obsession of the pastParticipating in the Use of Music is the Future

Gerd Leonhard, Music & Media Futurist www.mediafuturist.com

So why do we still have DRM?

Gerd Leonhard Music & Media Futurist www.mediafuturist.com

Today, we are here

You think music sharing is out of control now ? Think again.....

Tomorrow: SHARING x 1000

Gerd Leonhard Music & Media Futurist www.mediafuturist.com

8

Gerd Leonhard, Music & Media Futurist gerd@musicfuturist.com

The reality:

75.000 different devices that play MP3 files

Approx. 75 devices that play DRM’ed files

Gerd Leonhard, Music & Media Futurist gerd@musicfuturist.com

Today

Soon...

75-80 Million devices

1 Billion+ devices

Gerd Leonhard, Music & Media Futurist www.mediafuturist.com

So...

Which of the two options creates a better market place, benefits everyone, and will make a ton more $: an open format, or a closed format?

Gerd Leonhard, Music & Media Futurist www.mediafuturist.com

The business models that empower the end users are

the ones that will win

Gerd Leonhard, Music & Media Futurist www.mediafuturist.com

Some smart stuff from PWC

The Reality: Finding and Being Found is what generates the $$$$ - it’s the BRAND not the COPY

Gerd Leonhard Music & Media Futurist www.mediafuturist.com

F r o m ‘ T h e N e t w o r k ’ t o

N E T W O R K E D

Gerd Leonhard, Music & Media Futurist

I click - therefore I create value....

I program my

media --- it does

not program me!

Gerd Leonhard, Music & Media Futurist www.mediafuturist.com

Second: the issue of Ubiquity - Music Like Water

Gerd Leonhard, Music & Media Futurist www.mediafuturist.com

Water...

• Everybody uses everybody pays (but not at each and every point of use)

• Tap water is ubiquitous and ‘feels like free’, but ‘better water’ generates $100 Billion per year

Gerd Leonhard, Music & Media Futurist www.mediafuturist.com

Worldwide, almost a $100 Billion per year is spent for something you could also get for free!

Gerd Leonhard, Music & Media Futurist www.mediafuturist.com

$ 0

$ 45

Gerd Leonhard, Music & Media Futurist www.mediafuturist.com

How is Music... Like Water?

• Music is a basic need, to all, not a luxury (for some)

• Everybody uses, everybody pays (but it can ‘feel free’)

• A ‘right of access’ for all, anytime, anywhere

• Premium water costs extra, too

• ‘Normal’ use ‘feels like free’, excess use costs extra

•Ubiquity INCREASES value

Gerd Leonhard, Music & Media Futurist www.mediafuturist.com

Music Like Water would give us growth... like this:

Gerd Leonhard, Music & Media Futurist www.mediafuturist.com

Why buy bottled water if tap water is free?

• Guaranteed quality

• Premiums such as better sound

• Added values and more options (interactivity)

• Timeliness (not yet on tap everywhere)

• “It’s special”

Gerd Leonhard Music & Media Futurist www.mediafuturist.com

Ubiquity

23

Internet

95% buy

Scarcity

25% buy

But this is the biggest paradigm shift since the printing press

Gerd Leonhard Music & Media Futurist www.mediafuturist.com

Gerd Leonhard, Music & Media Futurist www.mediafuturist.com

And we must finally rid ourselves from the

obsession with selling copies

Gerd Leonhard, Music & Media Futurist www.mediafuturist.com

The business of

just ‘selling copies’ is OVER

Gerd Leonhard, Music & Media Futurist www.mediafuturist.com

The new business is

selling ACCESS first, and then

some more...

Gerd Leonhard, Music & Media Futurist www.mediafuturist.com

Based on these principals

• Not Prevention but Participation

• A new, collective license for the digital use of music - similar to the broadcast (i.e. radio) license

• Remuneration must be based on monitoring, tracking, and accounting of ACCESS and USE, not just on Unit Sales (or Performance)

• Copyright is the principle, Usage Right the reality

Gerd Leonhard, Music & Media Futurist www.mediafuturist.com

Challenge your assumptions Practice un-control... and get more $$ Think ‘Music’ not COPIES Lose the obsession with hits Appoint new, clued-in leaders

Gerd Leonhard Music & Media Futurist www.mediafuturist.com

So:

G e t o u t

I N F R O N T

o f a c h a n g i n g m a r k e t p l a c e -

N O W

Gerd Leonhard, Music & Media Futurist www.mediafuturist.com

Gerd Leonhard ‘Music & Media Futurist’

www.mediafuturist.com www.gerdpresents.com

CEO, www.sonific.com

Thanks for listening- and talk to me!

gerd@musicfuturist.com

www.gerdleonhard.net (Blog)