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The NEW Music Business

Presentation by Marc Geiger
by

Alex Bramwell

on 14 April 2016

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Transcript of The NEW Music Business

Phase 4
Change...It's Already Happened. Look!
PRODUCTS
CDs to mp3s to AAC to streams on demand
COMPANIES
Out with the old, in with the new
Wholesale replacement throughout
INDUSTRY
Promoters, agents, managers & internet players rising… record labels falling
DISTRIBUTION
Global and massive growth. Music and visuals everywhere on demand and new programming choices.
Will massively disrupt TV next. Books & movies on their way.
First,
A History Lesson...

The NEW Music Business
It's time to stop fighting...
streaming services will make you much, MUCH more $ if you let them.

And So They Shall Fall
Dominant industries throughout history have failed to navigate new technologies and it resulted in the downfall of their dominance
Only a Short 10 Years Ago...
The POWER was held by:
And Today...
They WISH they were:
Artists had it easy, the labels did the work...
(
Old
distribution channels, the way it used to be)
ARTIST HQ
Record Label / Artist / Manager
Content Created, Managed & Controlled
Retail
TV
Advertising
Live
Commerce
Radio
Commerce
Limited Interaction
Promo
Content
Promo
Press
Static Content
Promo
Non-Interactive
Promo
Non-Interactive
BUSINESS MODEL
Subscription, advertising revenue share, monetize social activity… sales of files and physical fading
RECORDING
Was expensive studios, now cheap pro tools
DJ DECKS
Was turntable, now midi controllers
DJ RECORDS
Was 12” and mix tapes, now PLAYLISTS and custom streams
CONSUMERS
Every device connected and different. YouTube, Social…
Promoting Music Has Changed!
ARTIST HQ
Artist / Manager
Content Created, Managed, & Implemented
(no Record Label)
(
New
distribution channels, the way it is today)
"As an Artist,
you
are now the marketer."
- Trent Reznor, Nine Inch Nails
Strategic Ad Buys
Positioning
Content
Social Marketing
Commerce
Content
Social Interaction
Commerce
Content
Commerce
Content
Ad Revenue
Social Interaction
Content
Commerce
Content
Social Networking
Commerce
Content
Curation
Content
Commerce
Content
Social Interaction
Commerce
Content
Ad Revenue
Content
Commerce
Where We Are Now
Deep Transition!
Files are OVER !!!!
They are stuck on one device
Limited selection
Hard to curate or organize
Expensive!!
Consumer habits moving from downloads to streaming in both music and video / tv / movies
Subscription/access models starting gaining traction
Despite being unsupported by artists and labels
Where We Are Now
The Age of Giants
Platforms with over 500 million customers will rule the next 10 years
Facebook, YouTube, Amazon, Netflix, Google, Yahoo, Pandora, iTunes, Baidu, Android
Indies will have to fight to scale…
Will Spotify and Pandora even survive?
So, what's BIG?
Access Models
Wireless: 3.2B paying monthly customers =
BIG
ISP: 2.6B monthly customers =
BIG
Platforms with scale
Facebook, YouTube, Amazon, Netflix, Google, Yahoo, Pandora, iTunes
Globalization
All music is universally accessible
Creating new music markets for artists everywhere
Music Service Provider (MSP)
All labels must participate
Catalog must be healthy for the consumer!!
$10 - $15 min. to consumer per month
Labels provide files to all qualified streaming services
Streaming services provides interface, curation, billing, customer service and accounting
SoundExchange or other organization collects from all distributors
Distributor split is 75/25 plus 50% of the advertising
MSP Revenue
Will DWARF

old music industry numbers!
10-Year Revenue Projection-Conservative
500 million paying customers @ min. avg. $12 / month = $6 Billion
$6 billion / month x 12 months =
$72 BILLION
Labels, publisher share is 75% of above plus advertising revenue is at least
$54 BILLION
15 years out monthly sub goes to $15, 1 billion subs and label share grows to
$135 BILLION
Remember…no packaging, returns or breakage
You earn big on high margin catalog revenue
Curate the library and you are golden!

Future Music Models
Subscription & Music Access Models
The Big One
THESE WILL SURVIVE!
Subscription Pricing
MUSIC ACCESS PRICING
$10-$15 per month for basic access
All you can eat streaming in high quality
Automatic Offline mode for your car or mobile use
Will migrate up to $15-$20 over time as more services and value added in
$2.99 per month per add’l family member
$5.99 per month for audiophile quality
Additional $4.99 per month for an attached peer to peer
All mixes, live, and files
Consumers will end up paying $15-$25 per month for music!!!

The New World
Don't be scared...it's much bigger and the revenue is growing fast.
It's Time !
License all your music
Consumers hate it when they can’t find their stuff
Engage digital streaming services
They are going to be bigger than all of retail and iTunes COMBINED
It’s access, access, access. JUST LIKE YOUR CELL PHONE…
NO ONE CARES ABOUT OWNING A FILE
Make 100% sure your meta-data is in order and engaging
Sure is a shame to give consumers and fans bad or messy info
Stop slowing this down
Will take our industry to well past $100 Billion
Recent studies showing a streaming customer pays much more than a cd or file buying customer.
Now all we need is users!!

Physical CD/DVD ↓ $3 - $8B
Music Access $54 - $135B
File by File (iTunes) $5 - $15B
Premium Radio $1 - $2B
Artist Channel (D2C) $1 - $2B
Advertising Revenue Share $10 - $15B

Total New Music Biz $74 - $180B
GET OUT OF THE WAY!
More scale and huge players...same players who do social, or iPhone or maps
Companies who don’t even know what music is are getting into the game…and they have more than 500 million customers
It hasn’t even started…literally.
Spotify, Rhapsody, Napster, MOG … Like Excite, Alta Vista, Ask Jeeves
New key players are entering the game
Beats Music, YouTube and 40 others like Amazon and Apple
Oh, yeah…ADVERTISING
Make sure you sign up for your rev shares
The money is going to be more than $10 billion here alone
Finally, PUT OUT GREAT MUSIC
You too can have success like these massive corporate labels. (Hippos In Tanks, Hyperdub, Don Giovanni, Weird World)

5 examples of what we don’t want to be:
Transportation - Southern Pacific Railroad
Telephony - AT&T
Caller ID
Computers - IBM
TV - The major networks
Media - MTV
In front of our eyes…No video on demand?? Come on!
All remained attached to an old technology for “valid” reasons and couldn’t make the leap to the next opportunity and BLEW IT. They could not adapt - now it’s your turn...
Huge growth among streaming services
YouTube, Pandora, Shazam, Internet Radio, Blogs
Files are becoming obsolete as memory is filling up on mobile devices
Music business is rebuilding revenue and on the edge of a massive surge
Media influence also transitioning in a big way
Pitchfork, blogs, playlists, etc.
Physical CD / DVD
Make better packages to enhance physical value
File by File (iTunes)
Dis-incentivising business model
Premium Radio
Artist Channels / Direct to Consumer
Advertising
For the first time, artists and labels share in ads with media companies
Full transcript