Emergent Futures Tumblelog

This is the Tumblelog of Paul Higgins and Sandy Teagle - Futurists from Melbourne and Brisbane in Australia. Go to Emergent Futures to see more or follow on Twitter at FuturistPaul . If you right click on the pictures, titles or links in these posts you will be able to go to the original story on the web. If you click on comments for each post you can either read what others have said or add your own comment via Disqus. If you click on the date of a post it will take you to a single post view where you can copy the web link if you want to send it to someone else. If you click on the tags it will take you to other stories from Emergent Futures with the same tag.

stoweboyd:

Where’s the tipping point in the transition from owned to rented music? Is Spotify the fulcrum in this change?

Robert Andrews via paidContent

Globally, digital music subscriptions rose 64 percent to 13.4 million through 2011 (source: IFPI) - but that is just three percent of UK industry revenue. Downloads, dominated by iTunes Store, shipped 1.1 billion singles in the U.S. alone in 2010 (source: Nielsen SoundScan).

“For streaming to go mainstream, we need to hit somewhere like 10 times that,” MusicWeek editor Tim Ingham told a MusicTank industry seminar on the topic last week.

And industry analyst Mark Mulligan said: “We need to get to the next level of scale before ARPU (average revenue per user) actually matters to artists as well as labels.”

Spotify, which currently leads the sub-sector with three million subscribers amongst 10 million active users, has stated its aim to reach 100 million users all by itself. On its current free/premium conversion ratio (20 percent of active users), Spotify could bring labels some 20 million paying subscribers by the time it hits its target.

A hundred million subscribers would change the game completely for artists and managers,” Ingham said.

But how will Spotify and its peers, like Rdio, Mog, Rara and WiMP, get there?

Each has had growing but relatively little success selling direct to customers. Many are revelling in the extra exposure brought by their recent Facebook connection. Mobile has been the thing to drive the business for everyone so far. But each ultimately wants to be offered through bundling deals with telcos and ISPs.

Time and again, online economics show one way to achieve scale is to become part of the fabric of the internet. Many talk about Spotify’s API, the technology rules which allow developers to make new products from Spotify’s platform - but, right now, the offering is notably limited for such a high-profile service and has gained few adopters.

“If Spotify goes to scale in the way Tim was talking about and gets hundreds of millions of people using it, Spotify could end up becoming effectively an API for music,” industry analyst Mark Mulligan told MusicTank’s seminar.

Posted at 1:14pm and tagged with: Tech, Technology, Music, Disruption, Trends,.

Eric Eberhardt, creator of You are listening to, a website mixing live police radio feed with ambient music, kind of blew our minds with his Q&A. Read the whole thing on our blog. Check out his project page here. (via kickstarter)

Posted at 5:54am and tagged with: music, business models, disruption, tech, technology,.

As an old-school internet guy *and* a massive music nerd, I’ve spent a lot of time thinking about the future of the music industry (and similar content businesses) over the past 15 years and I’ve come to the conclusion that most traditional publishing models are totally unsustainable at this point, and are just being kept on life support by copyright, DRM and other types of artificially-imposed scarcity. But the overwhelming sense of community and real passion I’ve found in dealing with all the “You Are Listening To” artists in the last year makes me very optimistic that this violent restructuring of the music “industry” is actually the best thing that could possibly have happened to “music” itself, and so it’s a real honor to be a part of that, to whatever extent I’m able to contribute.
In 2011, we collectively listened to 64,876,491,602 songs on the Internet. Whether it was on YouTube, SoundCloud, Rdio or MySpace, the citizens of the Web listened to quite a lot of music last year. Bands and musicians made over 3 billion new fans, who viewed artist profiles over 16 billion times. These are just a few data points recently released by Next Big Sound, a startup that tracks the popularity of music and individual artists across a range of digital music providers and social services.
The music industry has been waiting more than a decade for Ek. Or more specifically, someone—anyone—who could build something (a) more enticing to consumers than piracy while (b) providing a sustainable revenue model.

Digital music sales top physical sales

According to a Nielsen and Billboard report, digital music purchases accounted for 50.3% of music sales in 2011. Digital sales were up 8.4% from the previous year, while physical album sales declined 5%.

Full Story: CNN

Posted at 8:25am and tagged with: music, economic, disruption, tech, technology,.

Digital music sales top physical sales

According to a Nielsen and Billboard report, digital music purchases accounted for 50.3% of music sales in 2011. Digital sales were up 8.4% from the previous year, while physical album sales declined 5%.
Full Story: CNN
With most other businesses, if a supplier makes unreasonable demands, a retailer can turn to other providers. Since copyright law gives record labels and publishers a government-granted monopoly, no such option is possible with music. Digital vendors have only two options: Accept the terms or not include those songs in their offering.

fred-wilson:

a picture tells a thousand words

felixsalmon:

(via Same Old Song | Media Piracy | The American Assembly)

Posted at 3:40pm and tagged with: disruption, music, technology,.

fred-wilson:

a picture tells a thousand words
felixsalmon:

(via Same Old Song | Media Piracy | The American Assembly)

stoweboyd:

Mulligan is right to say that innovation is being stifled in the music world by the stranglehold of the labels:

Mark Mulligan via Forrester

Music subscription services are stuck with the Innovator’s Dilemma, but an unusual flavor of it. They are a sustaining technology that is forced to improve through modest sustaining improvements because of the restrictions inherent in the agreements with rights owners. In any other fast-moving technology market, locking a product’s feature sets down five years ago and refusing to significantly change them would result in the inevitable demise of the product. Imagine if Apple had stuck with the first-generation iPod and not introduced touchscreen technology, the App Store etc… . . A disruptive challenger would have quickly usurped Apple’s market lead with a disruptive alternative. (Of course, Apple does so well in this regard because it does such a good job of being its own disruption, but that’s another story.)

Music rights owners have a monopoly of control of content, and the net effect is a closed market not subject to normal laws of free market competition. And because rights owners are inherently conservative (some less so than others), they are inclined to license to sustaining technologies rather than disruptive ones. Their priority is — totally understandably — protecting against revenue decline, rather than technology innovation. They argue that both are important, but in a world where consumer demand is shaped by disruptive (unlicensed) technology such as Rapidshare and BitTorrent, dual-prioritization is a luxury they cannot afford.

And so, what happens is that the main licensed products fail to break through to the mainstream despite the best efforts of the innovative startups doing all they can within the constraints of their licenses. They have the benefit of knowing that their competitors are chained with the same manacles, but it is cold comfort because the net result is overall market stagnation. Sure, there will be some market share achievements, but the overall market will be continually outperformed by the disruptive alternatives that aren’t shackled by rights owner conservatism: the illegal free sector.

Unless rights owners start to license to truly disruptive alternatives (e.g., subsidized $3.99 unlimited MP3), the market will continue to fail to compete effectively with free. Lots of choice of the same service isn’t choice at all. There are c.300 download stores in Europe, but they are all very minor variants of the same basic offering. Hence, the market has stalled.

It is time for dramatic music product innovation. It is time for the record labels and publishers to become their own disruption, whilst they still can.

Posted at 11:41am and tagged with: music, business models, disruption,.