Edison phonograph

1878

First US broadcasting station established

1920

air time SOLD for FIRST“commercial message”

1922

fi rst legislation PASSED dealing WITH ‘BROADCAST”

1927

33 1/3 RPM LP introduced

1931

FM radio technology PATENTED

1933

Transistor radio

1954

FCC adopts standards for stereo FM broadcast

1961

Pirate radio

1964

Compact cassettes introduced

1965

Sony walkman debuts

1979

MTV LAUNCHED

1981

Enter the Compact disc

1982

Vh1 premieres

1985

Mp3 introduced on web

1994

Cd now starts selling music online

1994

NAPSTER LAUNCHED

1999

iPOD and iTunes arrive

2001

PANDORA & MOG LAUNCH

2005

SPOTIFY LAUNCHES

2008

COLDPLAY FIRST WITH 1M IN DIGITAL ALBUM SALES

2008

EMI SOLD TO UNIVERSAL

2011

I WANT MY MTV?

http://www.tastefullyoffensive.com/2012/11/why-mtv-doesnt-play-music-videos-anymore.html

LONGFORM VS. SHORTFORM

• Revenue from recorded music in the U.S. amounted to $7 Billion in 2011, less than half for the industry at its peak in 1999 (RIAA)

• Apple said this week that its iTunes store had sold its 25 billionth song

PHYSICAL VS. DIGITAL

• All this points to the leveling effect of digital technology, social media, and everything else that blew up the old industry

• In 2012, the compact disc continued its long decline, with sales down 13% from last year, and down 70% from 10 years before (SoundScan)

• iTunes offers 28m songs, Spotify 20m, MOG 16m vs. Amoeba 250k records

• HD audio coming

THE INTERNET HAS PERMANENTLY CHANGED USER BEHAVIOR AND CONSUMER EXPECTATIONS:• PERSONALIZATION• INTERACTIVITY• IMMEDIACY• COMMUNITY• FREE

THE WEB EFFECT

YOUTUBE

• Nearly 2/3 of Teens use YouTube as their primary music source according to Nielsen

• With 1 Billion views daily, it’s now the biggest global audio/visual platform

• Universal Music Group #1 Ranked Most Viewed Last 30 Days with 573,037,596 views

• Vevo #1 Network with 1.8B (tied with Machinima)

THE ANTI-MODEL

AT FIRST, NOT PEGGED TO BIZ MODEL:

• NO CHARGE, FINANCIAL REWARD FOR CONTENT CREATION• LACK OF BARRIERS TO PARTICIPATION• DOMINANT RECORD DISTRIBUTION MADE IT HARD FOR

PEOPLE IN INDUSTRY TO THINK AUDIENCES WANTED TO CONSUME CONTENT IN A DIFFERENT WAY

• A PLATFORM DOES NOT MAKE ANY ASSUMPTIONS ABOUT HOW PEOPLE ARE GOING TO USE IT

• YIELDED DISCOVERY OF NEW PATTERNS OF ATTENTION AMONG AUDIENCE BEHAVIOR RATHER THAN BUSINESS POLICY

ABILITY TO INTERACT WITH AUDIENCES KEY TO YT’S SUCCESS:• INITIAL MODEL TO BUILD AUDIENCES AROUND

NICHES WHETHER DUBSTEP OR MAKEUP• THE AUDIENCE TURNS INTO USERS• USERS TURNED INTO CREATORS• THOUSANDS OF CHANNELS NOW ABLE TO FIND

THEIR AUDIENCE AND BUILD CONTENT SPECIFICALLY FOR THAT AUDIENCE

THE INTERACTIVE MODEL

UK YOUTUBE STARS

• JAMAL EDWARDS SB.TV HAD 144M CHANNEL VIEWS WITH £200K IN REVENUES 2012

• ALEX DAY 500K PAID DOWNLOADS• LUKE HOOD UKF BASS CULTURE 250K ALBUMS SOLD

THE TRENT REZNOR EFFECT

• WHO NEEDS A LABEL NOW?• FREEMIUM MODEL WITH VOLUNTARY

TRANSACTIONS• “PATRONET”• http://www.techdirt.com/articles/

20090201/1408273588.shtml

STREAMING VS. DOWNLOADS

• As an alternative to downloads, streaming music is gaining, served up in various styles by services like Pandora and Spotify

• Even Myspace is back, having recently relaunched with a clean interface and a mandate to siphon music fans' loyalty from FB

PANDORA

• Share of total US radio listening now stands at 8.03%, an increase of 5.55% with 1.39 billion listener hours

• Platform’s monthly music metrics for Jan 2013 show listening hours increased 47% - up from 952 million during the same period last year (Hypebot)

• 65.6 million active listeners at the end of January, an increase of 38% from 47.6 million (YoY)

• Current strategic focus is to grow car listeners (only 1 million now)

SPOTIFY

• Sweden, home of Spotify, saw overall recorded music income rise from just over SEK 829 million (£79.82m) in 2011 sales to over SEK 943 million (£90.8m) in 2012

• Overall 2012 Swedish music sales increased 14% with 90% of all digital income coming from streaming services

• Digital sales increased to 63% of total music sales, up by 12% compared to last year

• 90% of these digital sales come from streamed music services (82% in 2011) while 10% are from other internet services (18% in 2011)

• Album sales account for 35% total music sales• Sales of physical albums decreased by 15% in 2012• Of the total music sales, 40 percent are Swedish performers and 60 percent are

international performers• Vinyl sales increased by 59% in 2012, but still represent just 1.4% of total music

sales

WHAT IF…

There is no music business model in the future? Then what?• Artists will expand selling direct to fans• Pledgemusic.com Kickstarter model for music• Brands will sponsor artists for distribution and

product placement

The “live” future

Now, the only money left for labels is live music is the business:• Will Live Nation is the WalMart of the

business?• More than ½ of 2012’s top 10 highest-grossing

concert acts qualify for AARP membership• Can touring industry find new sources of

revenue and survive Baby Boomer Bust?

What if…

• APPLE starts streaming iTunes• Alternative radio becomes mainstream• The per user model has replaced the per unit• The only future proof asset: The fan relationship

Trends to watch

• SUBSCRIPTION• MUSIC SEARCH ENGINES • APPS (DISCOVERY, SHARING)• SOCIAL RECOMMENDATION• SELF DISTRIBUTION• PIRACY• GENERATIONAL SHIFT IN CONSUMER

BEHAVIOR & EXPECTATIONS