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 Water
gerd@musicfuturist.com
www.gerdleonhard.net (blog)

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
controlling
distribution
- and the
beginning of
a new boom!


Controlling music is an obsession of the past
Participating in the Use of Music is the Future

So why do we still have DRM?


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

Today, we are here

Tomorrow:
SHARING x 1000


8


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

Soon...
Today 1 Billion+ devices
75-80 Million devices

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


The business models that
empower the end users are
the ones that will win


The Reality: Finding and Being
Found is what generates the $$$$
- it’s the BRAND not the Some
COPY
smart stuff
from PWC


From ‘The Network’ to
NETWORKED


I click - therefore I create value....

I program my
media --- it does
not program me!
Gerd Leonhard, Music & Media Futurist

Second: the issue of Ubiquity - Music Like Water


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


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


$ 45

$0

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

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


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”

But this is the biggest paradigm shift since the printing press

25% buy

Scarcity

Ubiquity
95% buy
23


And we must finally rid ourselves from the
obsession with selling copies


The business of
just ‘selling
copies’ is OVER

The new
business is
selling ACCESS
first, and then
some more...

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


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


So:

Get out
IN FRONT
of a changing
market place-
NOW

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)

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