By Gerd Leonhard
One of the most common reactions during or after my many Music 2.0 /Future of Media & Content presentations or keynotes is renewed fear of not getting paid for what you have painstakingly created, be it music, books, films or TV shows. These ‘fear & worry’ moments usually come from the often deeply-seated misunderstanding (or should I say assumption) that ‘Free’ for the end-user means ‘No Payment’ for the creator. This is, of course, not correct – and increasingly so: the Internet has not just disrupted the cherished traditional value model of selling copies, but at the same time the Web has also brought us powerful new ways of selling content as access and service, at a much lower cost and with global reach.
Just like Radio is free for the listener (in most cases – at least we don’t have to insert our credit cards in order to be able to listen to radio), it also does generate substantial amounts of income for creators (in most countries;) – and if we could finally agree on a suitable deal for online and interactive radio, it would drastically increase in the next few years, as well. Most performance rights societies (PROs) around the world are confirming this trend: public performance income is UP, and copy-related income (i.e. mechanical reproduction) is down. In the near future, it is not too far-fetched to imagine a revenue share for interactive radio streams that are tied directly into search results on the most popular search engines!
Now, let’s take it a step further: since the Internet is essentially the next Radio and TV – and places like Facebook are likely the next broadcasters – why not license the Internet (yes, streams AND downloads) just like we licensed radio? This will take us to the discussion on the flat rate, of course, see more here – I have a hunch that we will embrace this topic at MidemNet, as well 😉
But, back to FREE: Radio & TV licensing in Europe makes for a great example – most of us pay Radio & TV license fees if we own a device that can receive terrestrial (and now, digital) broadcasts. Many of us don’t exactly like paying this fee (I think it’s something like 150 GBP in the UK, per year and per user, for example), but we have simply gotten used to this unavoidable and accustomed payment and it’s just something we tacitly adhere to; at least until just recently when the debates over the archive access for public broadcasters got started. Therefore, the BBC, ARTE (one of my favorites), ZDF etc already feel like free to us, and so does the new BBC iPlayerthat allows UK citizens access to broadcast archives for 7 days after the initial showing. Maybe one of these days access to legal content via the Internet – at least on some basic level – could also be wrapped into the existing TV & Radio fees, or better yet: targeted, opt-in, permission-based advertising and brand marketing could provide the cash injections on our behalf!
Another great example for ‘FREE to the user’ that will generate real cash is Google’s new offer in China: anyone that uses Top100.cn (Google’s Chinese search engine) can stream and download feels-like-free music that is provided by 1000s of Chinese artists in return for a revenue share of the advertising on the search pages. See more details here. The result: Free Music, Money for the Creators (and keep in mind that their music is otherwise freely dished out across the Net already– see Baidu), Happy Users.
And consider Last.fm where their new owner – CBS – is paying for their users to enjoy ‘free’ music-on-demand, Myspace Music (same deal, except that the large ownership stake of the major record labels will make this a much tougher proposition for everyone that is not yet in their privileged club of shareholders), or Nokia’s Comes-with-Music, where Nokia is paying for the music as a new (and I think very interesting) way of marketing their mobile devices fka mobile phones – i.e. instead of running expensive ads they simply pay for the music to give to their users ‘for free’ (some people would call that branding I guess).
We will see this model explode in the next 12 months, and that’s great news for rights-holders and creators that are willing to give permission rather than intend to build ever-larger dams around the raging sea of user-empowerment that is the Internet: Music will Feel Like Free (FLF), 3rd parties will pay plenty, and the pie will grow for everyone – if we are reasonable about licensing fees and terms. Because, as Kevin Kelly has been pointing out for the last 10 years or so: if you can’t sell copies anymore, sell something that can’t be copied.
My expansion on his theme: If and when copies feel like free (but usage still generates cash, too) let’s up-sell to the EXPERIENCES of music based on having the users’ attention already.
In this context, Kevin Kelly’s wisdoms on the 8 New Generatives is a must read for anyone looking to understand how this works. Let’s embrace Feels Like Free as only the first step to many new income streams – there is more money in creating good content than ever before!
Written by Gerd Leonhard for Media Futurist
The Hit Music Academy | 2010
Get Hit Music Academy Twitter updates @hitmusicacademy
Get d.BRYJ Twitter updates @dBRYJmusic
Play your favorite hit songs 24/7 on Hit Music Academy TV: YouTube