Music 2.0
Revenue Streams, Consumer
Behavior and Policy Issues
Kristin Thomson and Michael Bracy
Future of Music Coalition
Educause, December 16, 2009
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Giving Musicians a Voice
• Founded in 2000 by musicians, artist advocates,
technologists and legal experts
• Work is rooted in the real-world experiences of
musicians
• Musicians and creators as stakeholders in
policymaking process
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FMC Core Philosophies
•
Policy decisions made in Washington have a much
greater impact on the music community than many
people realize
•
Artists need to be seen as stakeholders
•
The only antidote to an illegal Napster is a legal
Napster
•
Innovation + Access => growth of a legitimate digital
music marketplace
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FMC Policy Objectives
•
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Access to technology and deployment
•
competitive broadband marketplace
•
broadband affordable and accessible
Innovation is key
•
support development of new applications and
models that compensate creators
•
support network neutrality
•
FMC’s Rock the Net Campaign started 2005
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Musicians and the old
model for “success”
• Access to financing to record and manufacture
• Access to promotion
• Commercial radio
• Music industry and mass media magazines
• MTV
• Access to distribution
•
retail stores
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Major label contract
…but artists had to sign away their
copyrights in perpetuity
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Music industry’s
traditional model
• Exclusive right to manufacture and distribute
sound recordings
• Revenue from CD sales
• Revenue from licensing deals
• Invested in promotion to sell more records
• Videos
• Tour support
• Radio payola
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All efforts funneling
consumers to
controllable points
of purchase
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•
•
Technology benefits
musicians
Digital studios
affordable recording
More promotional channels, many free
•
Internet and satellite radio
•
Social networking: MySpace, Reverbnation,
Facebook, last.fm, Twitter
•
Blogs
•
YouTube
More universal access to distribution
•
lower barriers to entry for digital distribution
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channels
New landscape for
consumers...and labels
• Sudden abundance
• limitless shelf space
• 24/7 worldwide access to music
• even “out of print” albums were available
• in early days of digital music, it was free
• Labels unable to control manufacture and
distribution
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New ways to access music
• Digital Stores
•
Physical media through mail
•
Digital files
• On Demand Playback
•
Subscription services
•
Ad supported
• Webcasting, Satellite and Internet Radio
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Extra credit reading
Music Business Models
futureofmusic.org/article/article/new-business-models
Spreadsheet of how labels, performers and songwriters are
paid via various music services:
futureofmusic.org/files/newbusinessmodels.pdf
Illustration of how independent or unsigned musicians can use
companies like CD Baby, ReverbNation and Tunecore to get
their music into various music stores:
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www.futureofmusic.org/files/digitaldistribution.pdf
Digital stores
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Subscription services
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Webcasting + Radio
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What will Music 3.0 look
like?
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What will Music 3.0 look
like?
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•
Music consumers will continue to want
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access to robust, complete catalogs of music
•
to play “their” music on many devices, including
cellphones, in their dorm rooms, in their cars
•
to build playlists, share them with friends
•
to follow their favorite artists and bands via social
networking tools/Twitter
Musicians and rightsholders want
•
fair compensation, equal31 access to new technologies
Can we strike a balance
between
artist compensation and
consumer expectations?
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Music 3.0 and Policy
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Net neutrality
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Access to affordable, reliable broadband
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Proper metadata
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Future work
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Research on artists’ revenue streams
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www.futureofmusic.org
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