digital distribution
TRANSCRIPT
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Digital DistributionCause and Effect
WARNING :: Some of this presentation is MY OPINION...
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Barriers to Entry
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History
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It Started With Music
✤ The music industry used to need an “OFFICIAL DISTRIBUTION CHANNEL” We used to call these folks, Labels.!
✤ With the advent of DIGITAL we no longer needed to get the music into a “brick and mortar” store.
This led to DIGITAL distribution channels
differences listed here...
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1998 - 2002 File Sharing
Napster was the first widely!known “peer-to-peer” file!
sharing network
.....and on and on
You can’t stop file sharing unless you propose a valuable alternative
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Age of the Lawsuits
✤ The industry went for blood, labels suing technology companies, the RIAA targeting fans. The goal was to put toothpaste back in the tube !
✤ 35,000 individuals were targeted by the RIAA for “illegal file sharing”!
✤ RIAA later modified to “Three Strikes You’re Out” policy!
✤ This strategy effectively made CONSUMERS the enemy and further strained the relationship with the fan
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2003 Apple Saves the Day
DRM (digital rights management)!!
Music as a loss leader for a device!Margins Squeezed!
... but sales are up again
The A-La-Carte Download Store
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2003 - 2008 Mimic what works
✤ Amazon!
✤ eMusic!
✤ Wal-Mart!
✤ 7Digital!
✤ TuneTribe
A-La-Carte Download Stores
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... This didn’t fix P2P
✤ Peer to Peer sites continued to pop up. !
✤ BitTorrent became a phenomenon that helped to protect the identity of the file sharer (multiple people sharing “bits” of songs)!
✤ The major labels / RIAA continued to file lawsuit after lawsuit to
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As ISP Connections Improved This became a Movie and TV Problem… not just a Music Problem
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Piracy Flourished
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New Models Popped Up
Advertisement Based Services
The music is free, !but you’re going to have to sit through ads!(hey, this sounds like something we’ve got already)
AOL Music | Yahoo! Music
Network TV Began Streaming Shows with Commercials!Cable Providers began “OnDemand” Services
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New Models Popped Up
Subscription - All U Can Eat (free or for a monthly fee)
What if we streamed the data over the Internet?
Lets do that with DOWNLOADS!!!
For a monthly fee you can have all the music you like!
.... or your cellular network
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New Models Popped Up
Subscription - All U Can Eat (free or for a monthly fee)
For a monthly fee you can have all the video you like!
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I prefer subscription....
✤ Social Sharing Component!
✤ Both INSIDE the App!
✤ And OUTSIDE the App (www.facebook.com/music)!
✤ Apps!
✤ Mobile Streaming / Save Lists Locally
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AND THEN PEOPLE COMPLAINED THAT THERE WAS!LESS MONEY IN THIS SYSTEM
"There isn’t some God-given right to make millions from playing a guitar, it’s just lucky that there’s been a supply-and-demand thing for 50 years and now the supply is changing. The demand is still there, but you don’t have a right to get paid for every song you create. I value music very highly and come from a generation that’s used to paying £15 for an album, which seems like a fair price - £1 a song. But it’s a random amount in the first place. This generation is getting used to paying 70p for a song, or nothing. It’s a terrible shame, but it’s technology moving forward, as it does in every business. You can’t stop it."
- Tim Rice-Oxley, Keane
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Where do we go from here?
✤ The Major Labels (all THREE of them) have equity in Spotify!
✤ There is an added element of “SHARING” that traditional Digital Distribution does not.!
✤ It serves both MEDIA-FILES (who want the entire album) and CASUAL FANS (who want singles here and there)
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What Are Users Looking For?
✤ In the decade since Napster’s launch, digital music consumers have demonstrated their interest in five kinds of “free” selling points: !
✤ 1. Cost (zero or approaching zero),!
✤ 2. Portability (to any device),!
✤ 3. Mobility (wireless access to music),!
✤ 4. Choice (access to any song ever recorded) and!
✤ 5. Remixability (freedom to remix and mashup music)