Image by gleonhard via Flickr
This is really a funny yet revealing video - it reflects the growing trend to look among the larger content owners to look for monetization of their video clips on Youtube rather than sending take-down notices.
Read: The 26th Story: Tribes author Seth Godin discusses free content and the publishing industry. Just ran across this blog post and though I should share some of Seth's comments as they apply very nicely to the Future of Content and Media. Here are the best snippets - and I won't comment this time, as there is nothing left to say! You can download TRIBES (Seth's latest book), for free, here, btw
"The huge opportunity for book publishers is to get unstuck. You're not in the printing business...You're in the business of leveraging the big ideas authors have. There are a hundred ways to do that, yet book publishers obsess about just one or two of them. Here's the news flash: that's not what authors care about. Authors don't care about units sold. They care about ideas spread. If you can help them do that, we're delighted to share our profits with you. But one (broken) sales channel--bookstores--and one broken model (guaranteed sale of slow-to-market
books) is not the way to get there. If you free yourself up enough to throw that out, you'll figure out dozens of ways to leverage and spread and profit from ideas worth spreading..."
"...Generally, when you do something for an audience, they repay you. The Grateful Dead made plenty of money. Tom Peters makes many millions of dollars a year giving speeches, while books are a tiny fraction of that. Barack Obama used ideas to get elected, book royalties are just a nice side
effect. There are doctors and consultants who profit from spreading ideas"
"The lesson from Napster and iTunes is that there's even MORE music than there was before. What got hurt was Tower and the guys in the suits and the unlimited budgets for groupies and drugs. The music will keep coming. Same thing is true with books. So you can decide to hassle your readers (oh, I mean your customers) and you can decide that a book on a Kindle SHOULD cost $15 because it replaces a $15 book, and if you do, we (the readers) will just walk away. Or, you could say, "if books on the Kindle were $1, perhaps we could create a vast audience of people who buy books like candy, all the time, and read more and don't pirate stuff cause it's convenient and cheap..."
AlwaysOn's Jonathan Handel has published a nice column on what is happening with the content industries, and what the future holds for Hollywood and the 'big content' companies. Here are some of the best snippets and, as usual, some comments (links and images
are mine, too)
First, Jonathan defines the issue: "This battle turns on whether it’s true that “content is king,” as many people believe, or whether content is becoming a mere commoner while the technologies that distribute it become ever more valuable"
I have written about this juicy topic several times, and even made a few videos on it: the question is somewhat academic - I think that in the future, everyone gets to be king at different times. Sometimes it's Context (and filtering) that matters the most, sometimes it's metacontent (i.e. tags, ratings, bookmarks etc), sometimes remixes, sometimes the packaging, sometimes the platform. What's more, content does not need to be King any longer in order to make money - lots of new revenue streams around content (rather than solely off or within content) are in the oven - we just need to tune them up a bit more. And that's the tough part: we will need to let go off the old vine before the new vine has proven trustworthy; this trend is faster than our revenue modeling.
Jonathan writes: "There’s no doubt that traditional content is in trouble. Theatrical box office and admissions ...have generally been flat for a number of years. The DVD business is declining... The network television business is harder than ever, and also in trouble are other traditional content industries, such as those centered on music, newspapers ...books, and magazines. People still consume media the old-fashioned way, but fewer and fewer do so every day, especially younger people" A key phrase: fewer and fewer do so every day. Chew on that. The question is not IF but WHEN this sea change will flood your beach.
This defines it very well: the hunger for content is bigger than ever but the way that the digital natives consume it is totally different. And with a change of 'how' comes the shift of payment; i.e. with time-shifting, place-shifting and device shifting comes a much more troubling control & money shifting. While working on my next book I have looked at this trend in great detail, and it seems that if we compare traditional revenue models (such as 'selling copies') with the emerging new models (such as 'selling access' or advertising-as-we-know-it) we may be looking at a revenue reduction of 5:1, i.e. what made a dollar then makes 20 cents now. The NYT is not going to make as much money with their online ads as they made with their print ads, and they certainly won't sell RSS feeds for $1.50 per day. This is the challenge: new revenue models (as Kevin Kelly calls it, the New Generatives) must be developed than can lead to entirely different sources of remuneration and monetization, many of which we don't even know of, yet, and worse, which will become only apparent after the dismantling of the current revenue model. I sometimes call this the YouTube curse: we know we need it, we know we want it, we know it will work, we know it can make $$ but we (they) don't have the recipe yet!
Jonathan then talks about why traditional content is in trouble: "One [reason] is supply and demand. Demand for entertainment is relatively static, because leisure time is constant, whereas supply (online content) has grown enormously. Some of this is professional content, but even more is user-generated content (UGC). Other factors are the loss of physical form... the low-friction nature of the Internet ...and ad-supported new media business models....Market forces are also key: Computers, Web services, and consumer electronic devices are more valuable when more content is available and, in turn, these products make content more usable by providing new distribution channels. That encourages the growth of UGC and pirated content, reducing the market share of paid professional content, and, not incidentally, increasing the sales of new technological devices and services"
Brilliant explanation, and ending with a fitting if somewhat worrying quote: "As NBC Universal’s Jeff Zucker lamented, the content industries are being forced to “trad[e] today’s analog dollars for digital pennies.”
I had to chuckle while reading the next few sentences: "In contrast to the stagnation and decline of the
Jonathan's final paragraphs conclude: "Whether Hollywood will thrive, rather than just survive, is a harder question... While experiments with new media may yet bring profit to old media companies, the question remains: Will Internet-based distribution (much of it ad- supported) and mobile ever generate as much gross and net revenue as traditional distribution? If so, how much of that revenue will be captured by Hollywood, and how much by the technology companies that own the new distribution platforms? No one knows, but there’s been little good news in these areas for Hollywood. If the studios continue to lose their grip on distribution...they’ll be left with content as their core business. That’s a problem because, fundamentally, the economics of content creation are inferior to those of distribution. The former is an industrial process, painstaking and manual. The latter, in the digital age, is post-industrial and automated. ...Like the British, whose monarchy is now a mere appendage to a parliamentary government, content may find its kingdom ever more circumscribed by technology" Gotta love that one!
Here is my take on this: the telecoms' future plans need to converge or at least intersect with those of the studios so that content and distribution can work hand-in-hand; albeit at the utter mercy of the people formerly known as consumers - since it will be them (us) that will dictate what they like to both the telecoms and the content producers; and they will be talking about it very loudly, on 3 Billion connected and socially-networked devices. I agree with Jonathan that this is the challenge of course: now that CONTROL is on it's way out, and mere copies lose their meaning as chief instruments of money-making, what will take its place, where will that other 80% of the 'disrupted value' come from... and who will get to feast on these new pies?
It's always a great pleasure to be in Holland where people are usually very open to Change and... where 88.4% of the population is online ;) I was invited by the Dutch Broadcasting Organization (OMROEP) to speak about The End of Control, the People formerly known as Consumers and the Future of Broadcasting (Radio and TV), at their annual gathering and conference, NPOX.
Here is the Dutc
h description of the session: "Gerd Leonhard (Swi) is Media
Futurist. Volgens hem zijn we slechts 1 a 2 jaar verwijderd van een
generatie die ´af en toe online´ is, naar een generatie die ´nooit meer
off-line´ is. In zijn verhaal ‘the end of control and the people
formerly known as Consumers’, laat hij zien wat de gevolgen zijn van
deze verschuiving op het gebied van economie, cultuur en media en wat
de trends en uitdagingen zijn voor de toekomst" Google translates this in true web-way here.
So, as usual, here is the PDF (4MB, ~50 pages) the_future_of_broadcasting_gerd_leonhard_npox_2008_.pdf
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Cross posted from the MidemNet blog, Nov 6, 2008
I really enjoyed Ted Cohen's MidemNetblog post from last week as it quite succinctly pointed out the urgency to act now, and to implement real changes in the way the music industry works. I feel strongly that there may very well not be too many gatherings like MIDEM in the very near future if we don't embrace CHANGE much quicker than we have been.
I wrote on the SAG's strike and a project called Strike.TV on my Mediafuturist blog yesterday, highlighting the fact that the rule seems to be that we don't change unless the PAIN gets big enough. Well, it seems to me that we are there, right now, so here are 5 things that I believe would help us get there:
Truly collaborate to arrive at sweeping and effective solutions: the music industry has been notorious for in-fighting, wide-spread distrust, clubbiness and ludicrously fragmented business procedures and licensing rules. We need an industry-wide innovation initiative that looks at new business models from a global joint perspective of labels and publishers, artists and managers, agents and promoters, startups and societies. We need to rethink our traditional business rules and put the cards on the table - or that very table will start to burn down while we're sitting at it.
Question our desire to keep control at all times. This goes with point the 3rd one, of course: when watching the music industry actions, it all too often seems like it's more important to our 'leaders' (?) to remain and assert control than it is to make money. This is a deadly attitude that needs to change asap so - on the risk of sounding like a broken record here - let me spell it out for you: we will not, and we cannot control what people do with our music, going forward. How much they share, when and how, how they re-use it, how and when and where they listen to it, and which music they like. We can only participate, get their attention, get them to become fans, and then turn their attention into dozens of possible revenue streams. It's now solely about TRUST and Merit, not about selling copies. Give up control and get ready for much larger things to come back to you!
Open up and have real conversations with everyone, whether it's users and fans, or the government, the media, other industries, ISPs, startups etc. How many music industry 'leaders' are blogging? How many have a twitter feed? How many would reply to your email? How many are on Friendfeed? How many are on Facebook, joining the conversation? How many really want to HEAR from the public and show that they are open to conversation? Again, let me spell this out for you: Markets are Conversations. If the music industry does not want to have real conversations with it will shrink inevitably.I look forward to debating these concepts with you - please comment below. Also, if you like these 5 points, be sure to read my Music 2.0 book, online, as free PDF, on your iPhone, or the dead tree version - whatever.
The video of my presentation in Edinburgh is now available: Scottish Arts council - Gerd Leonhard. Topic: Futurist Gerd Leonhard talks about how the broadband-enabled, always-on world of digital natives equipped with 4.5 billion mobile devices impacts on emerging cultural practice.
Some helpful intel Blogs and the Purchasing Decision - eMarketer.
“For a portion of Web users, blogs rival search as a navigation tool, which has really interesting implications for advertisers,” said Rob Crumpler, CEO of BuzzLogic, in a statement. “Blogs are becoming trusted guides, steering users who are seeking very specific information to places of interest online.”
Good fuel for thought here: Advertising in 2009 | AlwaysOn. Here are the crucial snippets (I concur 100% but will add my own comments later this week)
"Mary Meeker had put out an interesting analysis that showed the correlation between GDP and advertising spend at 81%. Based on that analysis, at a 0% GDP growth rate, one would see a 4% decline in overall advertising. With a 2% contraction in GDP, one would expect to see 8% decline in advertising...There will be a continuing rotation of dollars from legacy advertising markets to online advertising. This contraction could put MAJOR pressure on the traditional media players. In particular... the newspapers, who still generate over $38 billion in advertising, with content that is often readily available from hundreds of sources, including blogs of which many are viewed as more “authentic” to young readers... Those who produce premium content, or content that has a high cost of production, controlled distribution, and long shelf life (eg the networks, film studios, etc) will have to work through their transitional issues and the current tough environment but will survive and thrive online....Search will grow much faster than display, as people will release dollars only to the extent they are certain they will see them back very shortly. Other areas of robust growth will include online video and in gaming advertising, as people increase time on leisure entertainment. Online video will get even more compelling as we get beyond the pre-roll only..." Well said, Amish!
Underlining and links are mine. Final thought:
I attended the RSA / Royal Society of the Arts Future of Music event in London on November 11, and was treated to a great presentation by composer, inventor, educator and MIT professor Tod Machover who showed us a whole new world of how making music has changed, and how the joy of music can be shared by everyone, going forward. TedTalks has a great video with Tod, here, btw.
Then, making the audience feel like they were dropped into a bucket full of ice cubes, the IFPI's (the International Federation of the Phonographic Industries, the sister organization of the RIAA) CEO John Kennedy followed right after Tod, and was given a painful 40 minutes to present his views on where the music industry is going (i.e.... back to the past) and predictably asking for more sanctions and tougher laws to make sure the money keeps on rolling in for his member companies, no matter what those pesky users want.
While Tod's speech was inspirational and eye-opening (as usual), Kennedy's speech was disturbing and deeply troubling (also as usual) because of his steadfast refusal to listen to face and consider the realities in today's music economy and his scary way of pounding away on old power-rhetoric that I thought had been buried for at least 10 years ("stealing a song on the Internet is exactly the same as stealing a Mercedes").
Despite the fact that the European Commision has rejected (more details here) the proposal spearheaded by the united (or shall I say universal) brotherhood of Kennedy, France's Sarkozy and U2 manager Paul Mc Guinness which is proposing to disconnect internet users that are suspected of sharing music online (the so-called 3 strikes and you're out proposal), Kennedy talked about this idea as if it was the holy grail of the troubled music industry. Let's take a good look at what all of these people are doing online, inspect their every move and communications, and if we think there's illicit music-trading involved, let's just pull their plug. If that doesn't sound like Chinese-style censorship and a bizarre Orwellian understanding of basic democratic principles, I don't know what does!
In good old Universal Studios, Universal Music and Lew Wasserman fashion, Kennedy was also not shy in making clear that no resistance would be tolerated. When I (speaking from the audience) asked Kennedy if what he is proposing does not amount to censorship and would basically take us onto the road of becoming the next China as far as intervention and control and lack of free speech is concerned, he responded by saying "the problem is not China, Gerd, it's people like You". Ah - I see, now we know. If 'people like me' would only shut up and let them get on with their plans, than it would all be just fine. Where have we heard this before - you tell me.
Frankly, when listening to John I can't help thinking of George Bush and his huge success in destroying everything good that America has ever stood for, or that the American spirit has accomplished. 8 years of Bush and the country is a huge mess; everything that could possibly go wrong, did...! Similarly, after ~ 10 years of IFPI vs the Internet, everything that could go wrong, has, as well: consumers and music fans sued, jailed and fined; the record industry universally hated by the digital natives; revenues falling off the cliff; innovation stifled by lack of cooperation and useful licensing schemes; startups shutting down because of lack of industry support; a computer company (Apple) the #1 player in digital music, the major labels bought up by private equity (see EMI) and / or deserted by their share-holders (see Bertelsmann and SonyBMG)... and on and on and on. Congrats, guys, well done!
I think we need the Obama of the music industry, NOW. And yes, we also need some people to be impeached because they are doing a disservice to everyone. The industry's Iraq & Vietnam -like war against the Internet is pathetic, wasteful and deeply wrong, and we don't need their Generals any longer.
I was a guest at TribalDDB London today, and here is what I talked about: The Future of Advertising, Media, Marketing and Business - the next 5 years. Needless to say we did not make it through the whole presentation but here is the entire PDF, anway. Enjoy! future_of_advertising_marketing_and_media_gerd. pdf
