What is Music 2.0?
Music futurist Gerd Leonhard has just released an informative video explaining what music 2.0 is and how the music industry should change to adapt to 'web 2.0' principles. The video is embedded below. Some of the themes are that control doesn't work (e.g. DRM and trying to control networking) and that music is meant to be shared. Even iTunes comes into some criticism - iTunes works great, says Leonhard, but it "is a locked community". Ultimately, Leonhard says that "open is king" and that "we have to give up on the idea of control and move to an open ecosystem in music." Check out the video!
For more on this topic see his new book, called Music 2.0, which you can download and pay what you like for (a la Radiohead).
Gerd Leonhard has written for our network blog last100 before, about music tax. I also recommend last100's Digital music: 2007 year in review article, written by our own Steve O'Hear, to get even more context about how music and web 2.0 are intersecting.
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Hmm... I downloaded the PDF and, while I've only given it a cursory scan, it seems heavy on assertions and light on research. One example:
"Drastically lower the prices for music products and you will see “piracy” disappear quickly because pirates cannot compete any longer. Can you make a profit on a lower sales price? Here is my math:
Reduce your productions costs by 25%; sell the product for 30%
less; cut in the artist for 25–40%, but most important look to
get 95% of your catalog exposed to their perfect target groups, via the Internet; save 50% on your marketing budgets; and take advantage of a much larger market altogether, because now people will be paying attention to music again."
Um... OK. And where do all of those percentages come from? Music is where all media will eventually go and I'd love to see some original thought on it, but we need to get beyond confident sounding assertions that are just someone's opinion and start seeing what works, what doesn't and how artists can make money from their music in a fully digital world.
Gerd Leonhard's ideas strongly resemble the proposals that the RIAA has been making for years via SoundExchange. For someone who claims to be a "music futurist", his ideas seem awfully outdated.
And I agree with rick gregory's post above: Leonhard simply hasn't crunched the numbers. He doesn't explain in concrete terms how the money will be collected and distributed to the musicians.
At one point Leonhard seems to imply that the system could be similar to broadcast radio, which pays royalties to performing rights organizations who, in turn, distribute those royalties to their members. But broadcast radio is a tightly regulated industry, and the performing rights organizations are protected by government legislation. Leonhard claims that no such legislation will be necessary. So how will the system be enforced?
And even if such a system could be set up, it's unlikely to compensate for the enormous revenues that are being lost as a result of illegal downloading.
At some point, the Web 2.0 community will learn what musicians have known for centuries: Talk is cheap.
Hi!
I think Gerd is partly right that his "idea" will be one model for music distribution in the future but if this is the only model? I doubt this a bit.
The good thing is with a flaterate model you got the 95% which are currently not paying any cent for music. This flaterate has to be very cheap but because of the very big target group the revenue decrease can be stopped.
But not everybody needs a flaterate or wants a flaterate.
The music industry realized that DRM and a la carte downloads did not solve the problem of illegal downloads.
I think there are several possible business models in the future.
If people not want to spend money the could accept some advertisment and got the music for free. Others will pay the flaterate and some only want to have 2 songs a month and want to pay for it. One key for success is that the technical problems which come along with DRM copy protection get solved first. Than a download must be easier and faster in legal portal compared to illegal one.
We can see a comparable development in the software market. Some people think flaterates with SaaS will be the future others think that nobody will give data away to data stores. Different people have differnt utility functions the right approach is the reach them all but not with only one product. This is already discussed on many places all over the web so nothing new at this point of time