Archive for January, 2008

Supporting New Business Models?

January 30, 2008

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Yesterday I mentioned shortly that copyright holders still living in “the old world” are not ready for taking risks in new business models. But even when they are not living there anymore, it would be impossible difficult to get them “moving”. Here is an example.

Maybe most of you already heard or read about it – The MIDEM speech of Paul McGuiness, Manager of U2.

He is talking about piracy, about stealing music … A manager who did with his Band 2005/06 one of the most successful Live Tours ever…

He is protecting his copyrights as long and as good as possible… and he should… but he probably wouldn`t support a legal new business model with realistic conditions. And the point is not, that he wouldn`t realize, what there is going on out there. Well… of course he made also some good arguments (see below). The point is that there is no trust to anybody, that he don`t want to accept that the value of his “information good” in the digital age has changed, that there is still this believe that you can reglement and control the internet.

Here some of the good parts of his speech:

“Personally I expect that Apple will before too long reveal a wireless iPod that connects to an iTunes “all of the music, wherever you are” subscription service. I would like it to succeed, if the content is fairly paid for. “Access” is what people will be paying for in the future, not the “ownership” of digital copies of pieces of music.”

“Network operators, in particular, have for too long had a free ride on music — on our clients’ content. It’s time for a new approach — time for ISPs to start taking responsibility for the content they’ve profited from for years.”

“I suggest we shift the focus of moral pressure away from the individual P2P file thief and on to the multi billion dollar industries that benefit from these countless tiny crimes — The ISPs, the telcos, the device makers.”


Coolfer collected some other opinions about the speech out there…

Last.Fm makes the deal!

January 29, 2008

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Sorry, i was out skiing for a few days and missed nearly a really big thing.

Last Fm  signed a big deal with the majors (see WIRED blog). Now you can play songs in full length three times for free “outside of your customized last.fm internet radio station”. all majors are in.

that`s great! that’s huge.

For me last.fm was already the paradise. You get “your kind of music” customized for free . The perfect radio! Perfect when you are in the “lean back” mode. But then there were some of these moments you want to hear a special song, a special artist- when you are in the “lean forward” mode – well, then it was time to change to itunes. The problem was – a new song, a song you got recommended often isn`t there in your library yet … – Now you even don’t have to change to itunes… you can stay at last.fm.

Well, the last.fm library isn`t complete either yet, but they are working on that.

The ultimative jukebox. We are one step closer to it.

Commenting on this new last.fm deal Gerd Leonhard had a nice thought about making a new business model running in these times.

“if you want to succeed in next-gen music ventures, do this:

a) just use the labels’ music in any way that you see fit (provided that is in some sort of way legally defensible, at least in some instances, sometimes, somewhere)

b) build your audience based on that attractive ‘free music’ availability (remember… that’s the idea behind radio!) and make the best of any and all those gray-zone licenses.

c) get a huge company to either buy or back you, and

d) THEN do a deal to get the rights to use the music in the way that you wanted to, to begin with. “

He is right. That’s the way you will get it running.
Why? Cause most of the copright holders would like to stay in “good old world”. They don`t want to take any risks. They don`t want to accept that content – their content – in the information age is “nearly” a public good now.
So it seems it’s impossible to build a revolutionizing business model with a “legal” deal from the beginning. The conditions would be insane.
So… you have to develop in the “grey zone”.

Hard to compete with free and quite good?

January 24, 2008

There are some blogs I am reading cause of my „marketing work life“ and usually they have not much to do with things I am writing here … but sometimes they have …

There is one I highly appreciate: The blog of Russell Davies, former Planner for the ad agency Wieden & Kennedy, right from these crazy „Nike guys“. Now Russell is working as consultant in his own „small“ agency  

His blog is great, really inspiring … read it, if you have anything to do with marketing…

…. check his older posts too,… ok …enough advertising for Russell…

A few days ago he wrote some thoughts about the future of advertising in the media and is wondering, if media/advertising is on an attention peak.

Really interesting is this thought about „free“ user generated content like his own blog:

 “And ‘free and quite good’ is really hard for regular commercial media to deal with.  Murdoch can’t compete with ‘free and quite good’. He can’t compete with wikipedia and Craig’s List. The only way to compete with that is ‘expensive and brilliant’ and a) that’s hard and b) difficult to get people to pay for. So in might work in some niches but it won’t work everywhere.It’s a simple equation – there’s a limited amount of attention in the world, if more of it is going to personal, non-commercial, un-advertised-in media, less of it will go to advertising and advertising will shrink.” 

Fewer of our attention will be “disturbed” by advertising, yes I agree, but advertising becomes much more effective in the future. So prices for ads will rise, and the media companies can stay on the same revenue level.But like Russel wrote, the quality / service / value of the (professional) media content must rise, cause of the “free” alternatives.

EMI Talks

January 17, 2008

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There is a lot of talking about the EMI going on … for example here, or here … not mentioning the rumours about the “artist protests“… anyway…

I’ve no clue what is exactly going on there at EMI, and I can`t judge the new “global strategy” of EMI…
but this mentioned goal

“maximize the value of our A&R talent and deepen relationships with our artists.”

should be prioritized. And as they will know, value is not just in recorded material.

But I am not sure, if you can deepen your relationships, when you are downsizing your company. Doing artist management, doing intensive content exploitation on all media channels, searching for new marketing opportunities et cetera …. sounds like a need for investment…

Just focusing on a cost structure that`s fit to the new digital market environment, and still focusing on recorded music… is missing a chance.

But what do I know…

The Wireless Age Is Coming! Welcome!

January 16, 2008

Ok, ok, just one of millions of posts out there about Steve`s keynote speech today….
Don`t want to talk in detail about this new amazing product, the Mac Book Air: Just one comment about the missing DVD  drive. I think it shows the new way. The age of wireless is here! It`s just the first step. But a few years from now, there will be a missing  hard drive (or only just a very small “buffer” hd) not just on your small mobile device, but also on your laptop or in your entertainment device at home…

These wireless developements will have a huge impact on the business models in the media industry. There is no need to store “content” anywhere at home, on your device. You only need access to the unlimited jukebox of content out there. – The “Age of Access” is the consequence.

Popstar as Brand

January 14, 2008

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For a few weeks now I am browsing through the dissertation of Marcel Engh: “Popstar als Marke. Identitätsorientiertes Markenmanagement für die musikindustrielle Künstlernentwicklung und -verwertung.”

A great book for people who have anything to with marketing in the music industry. But also worth reading for guys in the media industry who try to “exploit” content with artists.

Nice work… wish my thesis could get as good as this.

Business Models For Free

January 13, 2008

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In my opinion one of the most important concept for “financing” media content in the digital age is “make it feel free”. (The other possibility to finance content is distributing it with “high quality service” and great brand experience and get paid for it.)

Chris Anderson makes a list in his blog about all the imaginable revenue models for “free” business models:

  • CPM ads (“cost per thousand views”; banner ads online and regular ads in print, TV and radio)
  • CPC ads (“cost per click”; think Google ads)
  • CPT ads (“cost per transaction”; you pay only if the customer brought to you from a media sites becomes a paying customer. Here’s an example.)
  • Lead generation (you pay for qualified names of potential customers)
  • Subscription revenues
  • Affiliate revenues (think: Amazon Associates)
  • Rental of subscriber lists
  • Sale of information (selling data about users–aggregate/statistical or individual–to third parties)
  • Licensing of brand (people pay to use a media brand as implied endorsement)
  • Licensing of content (syndication)
  • Getting the users to create something of value for free and applying any of the above to monetize it. (Like Digg or our own Reddit)
  • Upgraded service/content (ed: aka “freemium”)
  • Alternate output (pdf; print/print-on-demand; customized Shared Book style; etc.)
  • Custom services/feeds
  • Live events
  • “Souvenirs”/”Merchandise”
  • Co-branded spinoff
  • Product Placement

Especially the first three, the “trival” ones, can get more interesting in the future, when “personalised advertising” finally is on the market and the consumers have accepted it.

Well… the list is long…

Seth Godin About The Music Industry

January 9, 2008

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I found this post from “Guru” Seth Godin about “things you can learn from the music business” today.

All his points are worth reading. They are not new, all of them were discussed before on some blogs out there, and Seth is not a “music business insider” but he made a nice recapitulation, summary of important points. Some sound very trivial… but they aren`t … .

And most important – all his thoughts play a major role for other media industry channels. They all have to face the same transformation in the digital age.

Mr. Lynch On Mobile Media

January 7, 2008

Maybe you have seen it…

Great statement from Mr. Lynch. He is right.

There is no real media convergence. Every channel has his own advantages and disadvantages. In some channels you will miss some things. Cinema is an own great experience. The product is unique, but anyway the media channel cinema will loose some visitors. For example all the guys who just want to see a film as fast as possible…. just to know it… to talk about it … there are new ways  to watch a film now.

Well… watching news in cinemas is out of fashion for a while, too.

Cluetrain – remember?

January 5, 2008

I didn’t read about it for a long time… not in blogs not in the press… nowhere mentioned…
Why?

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The 95 theses of the Cluetrain Manifesto have so many good thoughts written down… a lot of media companies can still learn about it.

I think it’s worth reading them from time to time.

76: WE HAVE GOT SOME IDEAS FOR YOU TOO: SOME NEW TOOLS WE NEED, SOME BETTER SERVICE: STUFF WE’D BE WILLING TO PAY FOR: GOT A MINUTE?
77: YOU’RE TOO BUSY “DOING BUSINESS” TO ANSWER OUR EMAIL? OH GOSH, SORRY GEE, WE’LL COME BACK LATER. MAYBE.

(Cluetrain.com)