Gerd Leonhard's Blog on The Future of Music, Media & Entertainment

Music CD sales fall 13 pct through 2006 in U.S. - Yahoo! News (does anyone STILL wonder WHY?)

Not really news, I would say: CD sales are in free fall (see below). Except for EMI which recently announced a bold move towards selling MP3s (even though there is plenty to complain on how exactly they plan to do it), and maybe UMG who is rumored to offer MP3s via Amazon's new service, the major record labels still PREFER CONTROL OVER MONEY. In other words, they would rather NOT sell MP3s or other non-DRM formats since they can't control what we (aka the evil users, and the people formerly known as consumers) would eventually do with them (OMG: we may actually share them without permission!), then to MAKE MONEY with their music.  As long as they keep pounding on the idea of having-the-cake and eating it, too, people will buy less and less CDs and continue to download for free, simply because there are so few other, worthy, easy, attractive options. Get it?  It's NOT the evil intent that creates the free-loaders it's YOUR intent to control the consumer that is being rejected.  And please don't tell me iTunes is such a perfect option and 'everyone that wants to be legal can just use iTunes: yes, it's easy and works great but the economic model as far as music sales in concerned (as opposed to hardware) is fatally flawed: a dwindling fraction of consumers will buy songs for $1 per track, in the long run --- everybody just stops spending at a certain point (I did at approx $800), and will look for options that don't punish interest in new music.

Here is my simplified recipe: 1) offer ALL music in open, 100% compatible formats  2) offer back catalog deals, bundles, subscriptions, and sooner or later, flat rates  3) start providing added values that only YOU can provide (such as bonus tracks, video, chats, blog / backstage access, concert downloads)  4) start treating the users / listeners / fans with the love they deserve (to put it in sorta california terms) instead of with the hate that your lawyers have in stock for them.

Wake up and smell the roses of music2.0 - or continue to "Duck and Cover" and be obliterated by the atom bomb that the Internet is to the media industries.

Read:  Music CD sales fall 13 pct through 2006 in U.S. - Yahoo! News.

"Though sales of music in digital formats such as downloads and mobile ringtones more than doubled in some cases during the year, digital sales did not grow fast enough to cover the revenue gap caused by the downturn in CD sales. Consequently overall music sales were down by 6.2 percent to $11.51 billion..."

My comment:

My book "The Future of Music" in Italian: Il futuro della musica

Link: AREA 51 � Blog Archive � Il futuro della musica.

My book "The Future of Music" in Italian!

Il libro
Il futuro della musica potrebbe essere una profezia, in realtà racconta ciò che sta già accadendo: l’industria discografica, come la conosciamo oggi, è destinata a morire. Eppure il business della musica non è mai stato così vivace e vibrante di idee innovative: le potenzialità dell’applicazione del digitale alla musica sono illimitate. Questo libro racconta i nuovi modi per trovare musica in rete, entrare in contatto direttamente con gli artisti, scoprire in anticipo tutte le nuove opportunità professionali che si stanno aprendo nello scenario del nuovo

Looks like my "The Future of Music" book is out in Japan!!

Link: Amazon.co.jp：デジタル音楽の行方: 本.

Wish I could read it!
Order here

some recent comments / reviews of my "Future of Music" book... and PODCASTS

are here.       Still don't have a copy?... go here to order one..
Podcasts are here

“Having been in the industry for over 30 years, I recognize this book as visionary and for a young or even experienced performer, like myself, an excellent look into the future of the music business as well as the technological possibilities head.  I had predicted the crumble of the castle created by the industry majors and their control of the radio airwaves a little over 5 years ago just on common sense principles with the innovation of web access. The author here has put those common sense principles with substantive information on the evolution of web technology and communication. This book,coupled with the equipment and software available to produce in personal studio facilities gives the 21st Century musician and performer an opportunity to not only produce himself but market himself in way unimaginable in the past.  This is an ABSOLUTE.... MUST HAVE.....in the library of anyone who intends to participate in the Music Business. I won't be enough just to read it, this is a small text book that future information as the industry continues to evolve, will be the basis of and will continue to serve as a reference source towards the fundamental understanding of the techno/business aspects necessary to understand.” - Earl Nesmith, Musart Enterprises

"Perhaps the most compelling music-biz think piece to emerge this year.  The authors challenge traditional assumptions about how to “make it” in the music business, providing much valuable legal and technical information along the way.  A must read for those who are banking on music for their own future." – David Roman, Future Music Magazine

"A solid look at how the music industry is healthy even if the music business is not. One of the best takes today on what a "pool of music" could mean to the artists, record labels and consumers." – The Register (UK)

"I think your book is the best music business book I have ever read!  I have recommended it at our recent meetings." – Franklin Spicer, Los Angeles Songwriter Co-op

Here is what some of the people who bought the book have said:

"The Future of Music is a prophetic book that nails right down where it's at. It's a must to read for everyone in Internet, media and music industries." – John Mark

"I just started reading you book and I can't put it down!" – Sue Frenz

"I just finished the Future of Music. Incredible read. I'm abuzz with inspiration and hope." – Chris Farrell

"I have just purchased the Future of Music.  Quite an extraordinarly book, to say the least." – Bob Beland

"Great book.  I have bought over a dozen copies for colleagues." – Richard Rees

"We loved your book and our entire team has been given the assignment to read it.  A resounding THANK YOU for raising the consciousness of our customers and audience.  We will be recommending your book to everyone we know." – Amity Carriere, hotlocalmusic.com

"This book articulates a new thinking that must be embraced by the next generation of music professionals, especially unsigned, independent artists who wish to develop and capitalize on today's available resources and tomorrow's opportunities." - Lior Shamir, We Are Listening

"Thank you for giving everyone a reason to believe in the wonderous vision of the future of music." – Joe Lefebvre

Future of Music book now PODCASTING

We have begun to Podcast chapters from the Future of Music. Periodically we will post a new audio chapter from the Future of Music book along with audio commentary from the authors on the latest happenings in the digital music space. The Podcast is available as an iTunes subscription and as an RSS feed.... go here! 

Motley Fool: Stocks That Will Rock Your World

Couldn't have said it better myself:  "As the broadband migration advances, the music industry faces a total makeover. Instead of EMI and Sony dominating, think Google, Microsoft, and Yahoo!"  says Mr Munarriz

The first chapter of my "Future of Music" book is now online

here  " Water plays a very essential role in our lives--nothing happens without water. Hundreds of thousands of people around the globe work on supplying water to everyone else, billions are spent on ensuring a steady water supply, and armies of researchers and workers deal with water-related projects. Along with air, water is an absolute essential of life. We do not pay for air--yet--but we do pay for water, and consequently some water utility companies are among the richest companies on the planet.

Despite the huge economic significance of water, and the clout that these "utility" companies have, how do we pay for it? Do we feel that water companies have undue monopolistic powers, and do we consider water to be a "product?" We more or less voluntarily pay for water, yes, but we hardly notice it anymore; the expense has become a fact of life. The payments are woven into the fabric of nearly everyone's monetary routines; no individual fees are charged if you shower at the gym, if you wash your hands in a public restroom, if you use a drinking fountain, or if you fill up your car radiator.

Interestingly enough, despite the ubiquity of water in most of the developed world, there is a vast market for "premium water"--bottled drinking water that appears to be better or different than tap water. Today, people may pay more for a bottle of Pellegrino or Evian than for a pint of Budweiser or even a gallon of gasoline! They pay for the ability to get "special" water that it is guaranteed to be free of bacteria, for the packaging that makes it convenient to carry, for the refrigeration that keeps it cool, and, in some cases, for added carbonation or flavoring. Could this model apply to the music business? Can we conceive of some kind of public utility model for music that would make any and all music available on a flat-fee basis, or on a very low "by-the-gallon" fee schedule? Could music be acceptable as a part of the cost of living, a nominal expenditure that we plan for?

It wasn't too long ago that a l eadi ng water company, France's Society General de L'Eau, morphed into a global media and entertainment company (Vi vendi-Universal), and tried to dominate the music space. Its CEO at the time, the now-infamous Jean-Marie Messier, embarked on a mission that was based on a very simi lar "content uti li ty" concept. His approach may now seem financially risky and badly timed, but the future may at least partially vindicate it .If we zoom back to the days before water was ubiquitously available (and ubiquitously paid for), some people did have to pay right then and t here to obtai n their water, on a case-by-case basis. Fights broke out over access to water, and in Africa and the Mi ddle East, many wars were fought over access to water. In the Europe of t he Middle Ages, access to water was often subj ect to complex negotiations and fee payments. When pipi ng and plumbing became so omni-present t hat al most everyone could si mply turn on a faucet and, voilá, the wat er would flow freely and magically, the entire pricing system changed very quickly into a public utility structure. New companies and service providers emerged, and the user benefited. Is this same process now beginning to take shape in the music business?  Let's take a look at a utility model i n the broadcast televisi on i ndustry. In some European countries, such as Germany and Aust ria, all resi dents that have televi sions or radios in their homes, regardless of how or whether they use them, must pay a yearly flat fee to t he government. The government then uses the funds t o pay for public television and radi o producti ons. This model , which resembles t he "media like water" concept, is by and large accepted by mill ions of people. People pay an average of $100-150 per year in return for what feels li ke a free, unlimi ted, and unmonitored supply of media programming. In contrast, the U.S. system of television broadcasting relies entirely on advertising revenues.

This system certainly has its own merits and encumbrances, but, like the European system, it creates what music futurist Jim Griffin of Cherry Lane Digital calls a "pool of money" that pays for the production and the dissemination of television programs. The basic trade of "you watch the ads and we will give you the programs for free" also offers an interesting contribution for our "music like water" mantra: could it be that, a few years down the road, I will be able listen to music on a digital network if I also accept some advertising? Or, will I be able to pay a fairly low yearly fee for all-I-can-eat access on digital networks, and subject myself to some targeted advertising to get additional access to some premium content? Cable television in Europe has shown the way here, as well. Most residents pay both for the public broadcasts and for their cable television providers--and, they rent videos and DVDs, as well....."

"The Future of Music": CORANTE Interview with Gerd Leonhard and Dave Kusek

From CORANTE "The record industry as we know it is dying, but the music industry is exploding" write authors Gerd Leonhard and Dave Kusek in their new book, "The Future of Music." Due to the digitization of music and the possibilities that digital media technologies afford, Leonhard and Kusek see a future where more musicians, more artists and more companies will share in a bigger pie.

In their book, the authors envision a future in which a good portion of digital music is provided via a utility-type arrangement - like water or electricity -, for a flat monthly payment, rather than sold ‘by the unit’ (i.e. as single downloads). The authors predict a promotion engine not driven from the top-down (i.e. by music industry tastemakers and kingmakers), but from the bottom up - by online music communities with members eager to share, and to communicate with each other about new artists. Depending on your point of view, that statement may sound alarming, pie-in-the sky, wise, or simply wrong. Yet through their experiences, both Kusek and Leonhard have earned the right to weigh in. Kusek is co-developer of the Musical Instrument Digital Interface (MIDI) standard to enable musicians to record in inexpensive home studios. In 1993, Kusek worked with A&M Records to design and develop the first commercially available enhanced CD able to connect audio CDs to a PC. And Leonhard has high-level experience on the executive, entrepreneurial, and creative sides of the music industry. In 1997, he founded and served as CEO of LicenseMusic.com, a company that until 2002, streamlined music licensing for such clients as Disney, Paramount Pictures, and Fox TV.

Corante recently sat down with Gerd and Dave to talk about the future of the music industry in this digital era....

My co-writer Dave Kusek on Well-Rounded Radio

Good interview here.
"In early February, I sat down with Kusek at the offices of Berklee Media to talk about "The Future of Music." In this engaging, hour-long conversation, we discussed:
* what will the record label of the future look like?
* how will today's working musicians change the model for those working today and in the future?
* how will music fans discover great new music and who will be the tastemakers of tomorrow?
* what will be the role of the artist's manager as labels become less important and marketing, promotion, and business acumen take the lead?
* what kind of new careers will develop in the music industry as all these changes take place?
And, since Kusek and Leonhard both realize that this is an ever-morphing landscape, they are regularly updating their web site, with blogs about developments, discussions, and debate about what the future holds for all of us...."

My Future of Music Book: Larry Lessig likes it ;)

Larry Lessig seem to like my Future of Music book -- I am flattered! Thanks Larry - coming from you this is the greatest praise I can think of. Check out his latest book "Free Culture" - great read, too - still chewing on it myself ;)