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The DNA of streaming
Andy Zondervanon 12 January 2013
Transcript of The DNA of streaming
Streaming The of Consumer behaviour ...Ownership Access Sharing to all music Single track or albums ...We used to buy Piracy Social Availability Music for Free mium... Accessibility has changed Hassle free Business models Opportunities ...but how do I get paid? ...is that the solution... ...really... ?! Advertisement! ...so who pays for it? to good music! Radio Piracy Opportunity Potential Audience Download Andy Zondervan Context Content I search for every single tracks... I mainly listen to playlists... Favourite Tracks We all know this... Lean Forward Lean Back How do you use your streaming service? A. B. Radio Download Subscription Model Piracy ? 38M 23M 8M 36M 70M Stream Value Preference / Taste Price / Wallet Place / Time Practical use etc, etc 20 to 25 Million users Subscription Freemium 120 to 150 Million users Europe: 600 Million US: 315 Million Access to Streaming services Less then 20%
use streaming services... Fastest user growth
in last 3 years More then 900 Million Early Adopters Huge Potential Audience Music Fan Heavy user Casual user Music Fans Potential
Quantity of Users +/- € €5 €10 €8 €1 €0,5 Reduction for annual subscribtion 50% Subscription price # Plays per month Music Fan the subscription price Amount € per stream Customer Behaviour Customer Misconceptions Mythbusting Level playing field Available information Abundance Access Marketing We have more then
15 Million tracks....! Best year
Music consumption 1999 Source: Rackspace - UK 2011 How Much would you pay
for a subscription Music service? x 1% x 5% x 17% x 28% x 12% x 17% - Air travel tickets - Flatscreen TV's €10 1000 €0,010 €5 400 €0,0125 Pays only half / = € per stream # plays per month Relevance...? € per stream Holly Grail? Revenue channels Radio Retail - etc, etc TV Hospitality Brands Comparisons vs Downloads vs Radio iTunes €0,70 Substitution debate €60: CD's / Downloads, per year Spending = 2x +/- €60 - purchasing music Investments Data Fees (API) Publisher Composer Author reported payout rates Inconsistent Average track length 3 min. +/- 100 Minutes per day +/- 40 Minutes per day Stream rate €0,005 140 700 €0,001 €0,010 70 3 Minute song Hour Only music 20 tracks Day DJ - 15 Minutes 15 Tracks 480 tracks 360 tracks Reach 10+ NL 14.400.000 Daily reach 10+ NL 100% 12,6% 1.814.400 Average Listening time 150 minutes 2,5 Hours Source: SKO 2011 Reach 10+ 12,6% 1.8M persons persons persons Daily reach X Streams per day 68M = 68.040.000 streams Payout per day €340.200 year €124M (€0.005) Per person 37,5 Tracks 50 Tracks €124M per year Total Revenue: €56M 2010 €24M per year €248M per year Measuring Cunsumption models Time to start a
legal streaming service +/- 18 Months! To gain all necessary
copyright contracts Contacts needed to close the deals 5000+ Listens to less then half Would have to go Up! €0,005 Subscriptions Advertisement Artist(s) Aggregators 70% Music Industry Independent Artist Business Model Signed Artist DIY or Aggregators Label Negotiations Marketshare...! Usage
(€ per stream) Overall
Marketshare Bigger labels Advance payments Potential use (CD's) CD's Downloads Live Actual use (Download) (Radio) (30.000+) Record company / Label 10% Copyright society 30% Company Stories!! Fair share...? Usage
(€ per stream) Label 25% Minimum payment Mainly based on: Potential use VS Actual use Example: Charts - Downloads - CD sales - Radio airtime Traditional
Long tail Marketshare Actual plays on
streaming services Discovery Contract - Actual use - Advance - Minimum Market share Negotiations Labels Market share Relevant
Portfolio Artist Artist Artist Artist Carefully build Branding Marketing Promotion deals Exposure Assets Streaming
Service Leverage Consumer / fan € 1X € € € € € € € Make money now! It's more then ever about the quality of the song Staying power "One day fly" songs profit more from downloads... Good songs profit from streaming The more plays, the more it pays... Artist Popularity Lifecycle Artist Long term! Artist Label Head Tail € Fair share? Market Product Service Buma/Stemra Business Development Data Sources David Touve Mike Mulligan SKO PWC Guestimates No NDA information... Theories Futuresource Rackspace Oppinions App Builders Add-on services Europe Potential Quantity
of users - UK X € they are willing to pay €120 per year €60 per year 23% €8M x 8,75 €70M Demand Curve Responds
to good music Download Streaming
service generic Your DNA...?! SpotiDJ Techcrunch Techdirt Nielsen IFPI Direct Sources Data Ideas Artists Labels Companies Ivir Etc, etc, etc Concepts Thoughts Questions Inconclusive...!! Ownership Access Distribution Model Abundance + - Scarcity Download (Traditional) Radio Piracy Streaming Service HybridModel Proposition Did you know: That the Gracenote database
Has over 130 Million tracks It would take 1200 years
To listen to them all... 85% lisen to music Guestimates +/- 5 Million
in the US less then 5%
of smartphone owners 54% = male users 46% = age 16 to 24 Female = 46% 39% = age 25 to 34 22% Increase €? Label Subscription price
€10 per month Today €120: Streaming Service, per year +/- €120 - acces to music Excluding Youtube!