mark mulligan: all change keynote presentation
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Presented at LSO digital symposium All Change or Business as Usual on 11Sep 2009 Jo JohnsonDigital Marketing ManagerLondon Symphony OrchestraBarbican CentreLondon EC2Y 8DSTel: 020 7382 2527Fax: 020 7374 0127Email: [email protected]: http://lso.co.uk P Before you print think about the ENVIRONMENT London Symphony Orchestra Ltd is a registered charity in England with registration number 232391.London Symphony Orchestra Ltd is a company limited by shares registered in England with registered number 83608. The registered office is Barbican Centre, London EC2Y 8DS.LSO Productions Ltd is a wholly owned subsidiary of London Symphony Orchestra Ltd registered in England with registered number 4412332. The registered office is Barbican Centre, London EC2Y 8DS.This e-mail, and any files transmitted with it, is confidential and intended solely for the use of the individual or entity to whom it is addressed. If you have received it in error, please delete it, do not use or disclose the information in any way, and notify the System Manager, [email protected]. The contents of this message may contain personal views which are not the views of the London Symphony Orchestra, unless specifically stated. All liability for errors and viruses is excluded.TRANSCRIPT
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Music and the Media MeltdownMark MulliganVice President & Research DirectorForrester Research
September 11th, 2009
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3Entire contents © 2009 Forrester Research, Inc. All rights reserved.
Music and the Media Meltdown
• How We Got Here
• The Media Meltdown
• Relationships Not Releases
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4Entire contents © 2009 Forrester Research, Inc. All rights reserved.
Digital Music 2.0: From Pay to Free, and Back Again
• How We Got Here
• The Media Meltdown
• Relationships Not Releases
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5Entire contents © 2009 Forrester Research, Inc. All rights reserved.
The music Industries are at a cross roads
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6Entire contents © 2009 Forrester Research, Inc. All rights reserved.
The three ages of digital music
Free PaidFree and
Paid
Rapid rise of file sharing
Modest rise of paid services
Evolution of multi-tiered marketplace
1995-2002 2003-2007 2008-
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7Entire contents © 2009 Forrester Research, Inc. All rights reserved.
Digital music has failed to meet three key strategic objectives:
1. Offset impact of declining CD sales
2. Compete with piracy
3. Generate a format replacement cycle
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8Entire contents © 2009 Forrester Research, Inc. All rights reserved.
The 21st Century European Music Industry Will be Smaller and More Complex Than Its 20th Century Predecessor
0 €
5 €
10 €
15 €
CD Sales Online digital music salesMobile digital music sales Ring tone sales (True and Ring Back)
Mu
sic
Rev
enu
es
(billions)
Source: Forrester Digital Music Model, 12/08 (Western Europe)
Recorded Music Revenues €6.4bn
Digital Music Revenues €4.0bn
2011: Music Market Begins to
Grow
2007: Accelerated
Decline
2001: Peak Revenues
Total digital channel share in 2014: 57%
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9Entire contents © 2009 Forrester Research, Inc. All rights reserved.
Music and the Media Meltdown
• How We Got Here
• The Media Meltdown
• Relationships Not Releases
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10Entire contents © 2009 Forrester Research, Inc. All rights reserved.
The Four Phases Of Technology’s Impact On Media
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11Entire contents © 2009 Forrester Research, Inc. All rights reserved.
Consumption is king as the distribution paradigm fades
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12Entire contents © 2009 Forrester Research, Inc. All rights reserved.
And monetizing consumption is the ticket out of the Media Meltdown
Consumption based monetization
Units based monetization
Total revenuesTotal consumption
Key
Current Media Landscape
Future Media Landscape
Media Meltdown
HighLow HighLow
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13Entire contents © 2009 Forrester Research, Inc. All rights reserved.
What do these have in common?
! They are both scarce, social experiences
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14Entire contents © 2009 Forrester Research, Inc. All rights reserved.
An implication: physical is the new physical
CD’s, downloads
Gigs, concerts festivals e.g. Live Nation
MoviesTheme parks, theatres e.g.
Disney
TV showsTheatre screening based events etc.
Print and online
publishing
Special interest events
Established Physical Distribution Business Models
Physical, Social Consumption Business Models
Media Meltdown Weakens Core
Revenues
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15Entire contents © 2009 Forrester Research, Inc. All rights reserved.
Closed loop ecosystems are the success stories of paid content in the digital age
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16Entire contents © 2009 Forrester Research, Inc. All rights reserved.
“The great wines of France are not content providers to the glass
manufacturing business”
Andrew Lloyd Webber to the House of Lords, April 2009
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17Entire contents © 2009 Forrester Research, Inc. All rights reserved.
Four Distinct Tiers of Music Services Built Around the ‘Four Cs’ of Digital Content
More Less
More Less
Content
More Less
Implementation: release windows
Convenience Implementation: discovery
& DRM
CostImplementation: pricing
& subsidies
Premium Services
Subsidized Services
Free & ’Feel Like Free’ Services
CommunityImplementation: forums,
networks
Same Same
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18Entire contents © 2009 Forrester Research, Inc. All rights reserved.
Music and the Media Meltdown
• How We Got Here
• The Media Meltdown
• Relationships Not Releases
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19Entire contents © 2009 Forrester Research, Inc. All rights reserved.
Music content should break free of the straight jacket of the album format leveraging new content assets
Structured studio releases
Live
Backstage, Interviews
etc.
Multimedia, Interactive
Content
• Formal album
• Singles
• EPs
• Remixes & covers
• Live concert streams
• Recorded concerts
• Live chat with artists
• User remix applications
• Interviews & outtakes
• Merchandize & ticket discounts
• Games etc.
Content Sources Content Package (e.g. 18 months of creative output)
Released via
successive release structure
d ‘windows’
to multiple channel partners
Route to Market
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20Entire contents © 2009 Forrester Research, Inc. All rights reserved.
Release Window
Preview Mainstream Pay ‘Free to Air’
(Week 3)(Week 1) (Week 6)
Single channel partners can leverage multiple release windows across distinct content offerings
Comes with U2 Handset / Orange Tariff
Comes With Music /
Orange Tariff
Orange Music Store
Orange Subsidized ISP Bundle
Consumer Product Bundles
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21Entire contents © 2009 Forrester Research, Inc. All rights reserved.
“The future is already here – it's just not evenly distributed” – William Gibson
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22Entire contents © 2009 Forrester Research, Inc. All rights reserved.
The Music Industries are at a cross roads…
…and one that requires careful navigation
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23Entire contents © 2009 Forrester Research, Inc. All rights reserved.
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