Edison phonograph
1878
First US broadcasting station established
1920
air time SOLD for FIRST“commercial message”
1922
fi rst legislation PASSED dealing WITH ‘BROADCAST”
1927
33 1/3 RPM LP introduced
1931
FM radio technology PATENTED
1933
Transistor radio
1954
FCC adopts standards for stereo FM broadcast
1961
Pirate radio
1964
Compact cassettes introduced
1965
Sony walkman debuts
1979
MTV LAUNCHED
1981
Enter the Compact disc
1982
Vh1 premieres
1985
Mp3 introduced on web
1994
Cd now starts selling music online
1994
NAPSTER LAUNCHED
1999
iPOD and iTunes arrive
2001
PANDORA & MOG LAUNCH
2005
SPOTIFY LAUNCHES
2008
COLDPLAY FIRST WITH 1M IN DIGITAL ALBUM SALES
2008
EMI SOLD TO UNIVERSAL
2011
I WANT MY MTV?
http://www.tastefullyoffensive.com/2012/11/why-mtv-doesnt-play-music-videos-anymore.html
LONGFORM VS. SHORTFORM
• Revenue from recorded music in the U.S. amounted to $7 Billion in 2011, less than half for the industry at its peak in 1999 (RIAA)
• Apple said this week that its iTunes store had sold its 25 billionth song
PHYSICAL VS. DIGITAL
• All this points to the leveling effect of digital technology, social media, and everything else that blew up the old industry
• In 2012, the compact disc continued its long decline, with sales down 13% from last year, and down 70% from 10 years before (SoundScan)
• iTunes offers 28m songs, Spotify 20m, MOG 16m vs. Amoeba 250k records
• HD audio coming
THE INTERNET HAS PERMANENTLY CHANGED USER BEHAVIOR AND CONSUMER EXPECTATIONS:• PERSONALIZATION• INTERACTIVITY• IMMEDIACY• COMMUNITY• FREE
THE WEB EFFECT
YOUTUBE
• Nearly 2/3 of Teens use YouTube as their primary music source according to Nielsen
• With 1 Billion views daily, it’s now the biggest global audio/visual platform
• Universal Music Group #1 Ranked Most Viewed Last 30 Days with 573,037,596 views
• Vevo #1 Network with 1.8B (tied with Machinima)
THE ANTI-MODEL
AT FIRST, NOT PEGGED TO BIZ MODEL:
• NO CHARGE, FINANCIAL REWARD FOR CONTENT CREATION• LACK OF BARRIERS TO PARTICIPATION• DOMINANT RECORD DISTRIBUTION MADE IT HARD FOR
PEOPLE IN INDUSTRY TO THINK AUDIENCES WANTED TO CONSUME CONTENT IN A DIFFERENT WAY
• A PLATFORM DOES NOT MAKE ANY ASSUMPTIONS ABOUT HOW PEOPLE ARE GOING TO USE IT
• YIELDED DISCOVERY OF NEW PATTERNS OF ATTENTION AMONG AUDIENCE BEHAVIOR RATHER THAN BUSINESS POLICY
ABILITY TO INTERACT WITH AUDIENCES KEY TO YT’S SUCCESS:• INITIAL MODEL TO BUILD AUDIENCES AROUND
NICHES WHETHER DUBSTEP OR MAKEUP• THE AUDIENCE TURNS INTO USERS• USERS TURNED INTO CREATORS• THOUSANDS OF CHANNELS NOW ABLE TO FIND
THEIR AUDIENCE AND BUILD CONTENT SPECIFICALLY FOR THAT AUDIENCE
THE INTERACTIVE MODEL
UK YOUTUBE STARS
• JAMAL EDWARDS SB.TV HAD 144M CHANNEL VIEWS WITH £200K IN REVENUES 2012
• ALEX DAY 500K PAID DOWNLOADS• LUKE HOOD UKF BASS CULTURE 250K ALBUMS SOLD
THE TRENT REZNOR EFFECT
• WHO NEEDS A LABEL NOW?• FREEMIUM MODEL WITH VOLUNTARY
TRANSACTIONS• “PATRONET”• http://www.techdirt.com/articles/
20090201/1408273588.shtml
STREAMING VS. DOWNLOADS
• As an alternative to downloads, streaming music is gaining, served up in various styles by services like Pandora and Spotify
• Even Myspace is back, having recently relaunched with a clean interface and a mandate to siphon music fans' loyalty from FB
PANDORA
• Share of total US radio listening now stands at 8.03%, an increase of 5.55% with 1.39 billion listener hours
• Platform’s monthly music metrics for Jan 2013 show listening hours increased 47% - up from 952 million during the same period last year (Hypebot)
• 65.6 million active listeners at the end of January, an increase of 38% from 47.6 million (YoY)
• Current strategic focus is to grow car listeners (only 1 million now)
SPOTIFY
• Sweden, home of Spotify, saw overall recorded music income rise from just over SEK 829 million (£79.82m) in 2011 sales to over SEK 943 million (£90.8m) in 2012
• Overall 2012 Swedish music sales increased 14% with 90% of all digital income coming from streaming services
• Digital sales increased to 63% of total music sales, up by 12% compared to last year
• 90% of these digital sales come from streamed music services (82% in 2011) while 10% are from other internet services (18% in 2011)
• Album sales account for 35% total music sales• Sales of physical albums decreased by 15% in 2012• Of the total music sales, 40 percent are Swedish performers and 60 percent are
international performers• Vinyl sales increased by 59% in 2012, but still represent just 1.4% of total music
sales
WHAT IF…
There is no music business model in the future? Then what?• Artists will expand selling direct to fans• Pledgemusic.com Kickstarter model for music• Brands will sponsor artists for distribution and
product placement
The “live” future
Now, the only money left for labels is live music is the business:• Will Live Nation is the WalMart of the
business?• More than ½ of 2012’s top 10 highest-grossing
concert acts qualify for AARP membership• Can touring industry find new sources of
revenue and survive Baby Boomer Bust?
What if…
• APPLE starts streaming iTunes• Alternative radio becomes mainstream• The per user model has replaced the per unit• The only future proof asset: The fan relationship
Trends to watch
• SUBSCRIPTION• MUSIC SEARCH ENGINES • APPS (DISCOVERY, SHARING)• SOCIAL RECOMMENDATION• SELF DISTRIBUTION• PIRACY• GENERATIONAL SHIFT IN CONSUMER
BEHAVIOR & EXPECTATIONS