Future Of Music

“Why would anyone want to be a musician in this environment?”

I wake up every day fascinated by this question. I think I know but would love to hear more from everybody. I posted this question to twitter tonight and this is what I got the first hour. Keep em coming. I would love to understand this better.
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musicadium@davekusek I would want to be a musician no matter what environment we were in. The desire to create would override, methinks.

andreakremer@davekusek Isn’t that like asking why anyone would want to play tennis? Do people who play tennis give up because they can’t make a profit?

timothyeric@davekusek fascinated that people still want to be musicians or by the environment and its challenges?

kmsolorio@davekusek passion is the only reason I could come up with. btw, very interested in learning more about your tools for musicians.

marjae@davekusek I am a musician because I love music and, more importantly, sharing it with people. This sharing gives a high unlike any other.

marjae@davekusek Great question! It would be great if you could share some of your replies with us. . . the questions certainly made me think!

Lars_Christian@davekusek I think that if “he environment is a factor on whether you become a musician or not, you probably won’t “make it” either way.

tigerpop@davekusek it’s not always about want.

Pattyoboe@davekusek Being a musician is just who I am … no matter the environment. Maybe like I was still a mom when my kids acted up, I guess ..?

gah650@davekusek it’s an inexorable artistic need to create; thank God.

melbahead@davekusek If being a musician is anything like being a visual artist then it doesn’t matter what one wants. It’s a compulsion, a calling

_willthompson@davekusek it’s extremely hard and counterintuitive to hold back from doing something you have natural predisposition for.

kimpwitmanRT @davekusek: why would anyone want to be a musician in this environment? can someone tell me? i wake up every day fascinated by this.

manishamusic@davekusek Being a musician is not particularly easy in any market-based economy. Something deep inside steers the wheels. Is it insanity?

PtbTrees@davekusek perhaps the love of music is enough to make it worth it. at least thats how I feel

atomicdacia@davekusek because its like a drug. Once its in you you just can’t get enough

Kalajdame@davekusek it seems like an easy way to make money i guess..i do it cuz i love to make music and if i could get paid for it ..u kno the rest

Bruce Houghton posted a positive view about the music business at Midemnet that I think paints a realistic picture about our short-term future. Its a good read and uplifting.

More from Gerd Leonhard as he once again attempts to predict the future. While many people scoff at those who try and look ahead and light the paths for the rest of us, Gerd is actually quite good at it. Here is a glimpse into his mind and some trends he suggests for the rest of the decade.

1 — We will soon see the emergence of many different kinds of iPhone-influenced Netbook-like devices; some will be Apple-made but most will not. These devices may be 2-3 times the size of an iPhone and will connect to the Internet in every conceivable way, i.e. 3G/4G, LTE, Wimax, Wifi etc. They will be touchscreen, zoom-interface enabled, cloud-computing, speech-controlled, location-aware, mobile-money equipped, socially hyper-networked, always-everywhere-on, HD-camera equipped and possibly project images and audio or even support basic holography.

In addition to the high-end, fully-loaded and perhaps still rather expensive versions that many of us in the so-called developed countries will gobble up, low cost and more basic editions for the developing markets will be sold in the 100s of millions (think India, China, Indonesia…). These smart gadgets will have very low energy consumption and therefore extremely long battery life, may even sport basic solar-power options, and may ultimately cost less than 30 USD, or even be ‘free’ (why bother to sell the box if you can make a lot more $ with selling services…. Nokia?).

It is these mass-market yet very smart and networked devices, together with cheap or free wireless broadband that will really revolutionize reading, newspapers, books and education; not to mention our music, TV and film consumption habits. Content commerce will be completely redefined as a consequence. As BTO told us a loooong time ago: “You ain’t seen nothin’ yet”

2 — Very cheap or free wireless broadband – at fairly high speeds, i.e. at least 2MB / sec – will be available in most places, particularly in the booming new economies of Asia, India, Russia and South-America, and a bit later, in Africa. Funded by the likes of Google and by the future ‘telemedia’ conglomerates, governments, cities and states, wireless broadband will probably reach 3-4 out of 5 people on the globe within 5-8 years. User-generated & derived content (UGDC for those of you that must have an acronym , virtual co-production, mobile editing and instant network sharing will explode by a factor of 1000, making control of distribution a very distant concept of the past. UGC or UGDC may make up to 50% of the global content consumption by 2015. Consumers will be (co)-creators, marketers, sellers and buyers, and come in a hundred variations, from totally passive to totally active. Then, indeed, filtering, culling and curation will be the key to success.

3 — Collective blanket licenses that legalize and unlock legitimate access to basic content services via any digital network will emerge, and are likely to take over as the primary way of content consumption, around the world (but in Asia, first). Just like water or electricity which is readily available when moving into a new home, the basic access to content will be bundled into access to digital networks, i.e. via ISPs, operators, telecoms, portals etc. This shift is starting with music (as already done by TDC in Denmark, and Google in China), and will be quickly followed by films, TV, books and newspapers. Access may often – but in local variations – ‘feel like free’ to the user but will in fact generate 10s of Billions of $$ via blanket licensing fees (yes… those pools of money), next-generation advertising and branding, data-mining & sharing, up-selling, re-packaging and many other new generatives. This topic will, btw, be the gist of my RSA presentation tomorrow – if you can’t be there in person, you may want to listen to the live audio, via this link.

I think that governments around the world will call for and / or support the implementation of collective content licenses that wil finally legalize content usage on the Internet, similar to how governments pushed for the radio and broadcasting licenses approx. 100 years ago. Whether these blanket licenses will be voluntary or compulsory remains to be seen – in any case the only alternative is to perpetuate a severely dysfunctional telemedia ecosystem that criminalizes almost all users and stifles innovation while generating virtually zero new revenues for the creators.

4 — Fuel-cells and other next-generation mobile energy sources are a certainty. A serious increase in mobile device power (and therefore, its use) will be achieved by employing next-generation technologies such as fuel cells that could provide for up to 500x the usage time that we have today. This is likely to become a reality in 3-5 years and will revolutionize how we use – and how much we rely on – our mobile devices, especially in countries where there the fixed-line power infrastructure is much less developed or non-existent.

5 — Completely targeted and personalized advertising, delivered largely on totally customized mobile computing & communication devices, will turn the the $ 1 Trillion USD advertising and marketing services economy upside down. Behavioral targeting and user-controlled advertising will, of course, become an even hotter potato and a much discussed challenge, but the good old deal of ‘I give you attention & personal data and you give me value e.g. content’ will be even more pronounced on the Net. In fact, advertising as we knew it is already more or less outmoded and will, during the next 2-3 years, be completely reinvented. Privacy and Trust are the #1 issues here.

The implication is that if your data (within your specific sets of permissions and opt-ins) is used to bring you perfectly synchronized advertising, than advertising really becomes more like content, too. Watch this play out in the mobile advertising space, starting this year, and quite possible boost the global value of advertising-content by more than 100% by 2015. Google will be the main driver here, plus Facebook, Nokia and yes… Twitter (soon to be = Google).

6 — We will witness the more or less complete decline of most forms of physical media within 7-10 years. The very definition – and thus the core economic business models – of newspapers, magazines, CDs, DVDs and books will be completely re-written, and new forms of content packaging will rapidly emerge. We can already see a preview of how this may work in the current mobile applications boom: content as part of software packages; paying for the packaging, the curation, the bundling, the personalization – not just for the zeros and ones that are ‘the copy’. This trend is important not just because it will reflect the users’ (or better… followers’) new consumption habits but also because because of the increasing need to save energy and material costs – and moving from content products to content services will certainly go a long way in this regard. The total decline of printing in people’s homes, and for personal use, will commence, as well.

7 — Paying for privacy will become a distinct option. Today we pay to go online and connect; in the future we may end up paying for the luxury to go offline, disconnect, enjoy the quiet, and give our brain some rest. Maybe if we don’t want to share our click-trails and usage data, we will be able to make cash payments instead – and the more you pay, the more private you can be..?

8 — Travel 2.0: alternatives to ‘actually going there’ will explode: immersive, 3D video, virtual rooms, holography. This is a key development that will nurture new forms of entrepreneurship, education and group working.

Read more from Gerd Leonhard here.

Kevin Kelly has written extensively on the need to create value around digital copies in order to create the revenue opportunities that are falling away every day for digital media. Here is an excerpt from his great essay “Better Than Free”.

Eight Generatives Better Than Free

Immediacy – Sooner or later you can find a free copy of whatever you want, but getting a copy delivered to your inbox the moment it is released — or even better, produced — by its creators is a generative asset. Many people go to movie theaters to see films on the opening night, where they will pay a hefty price to see a film that later will be available for free, or almost free, via rental or download. Hardcover books command a premium for their immediacy, disguised as a harder cover. First in line often commands an extra price for the same good. As a sellable quality, immediacy has many levels, including access to beta versions. Fans are brought into the generative process itself. Beta versions are often de-valued because they are incomplete, but they also possess generative qualities that can be sold. Immediacy is a relative term, which is why it is generative. It has to fit with the product and the audience. A blog has a different sense of time than a movie, or a car. But immediacy can be found in any media.

Personalization — A generic version of a concert recording may be free, but if you want a copy that has been tweaked to sound perfect in your particular living room — as if it were preformed in your room — you may be willing to pay a lot. The free copy of a book can be custom edited by the publishers to reflect your own previous reading background. A free movie you buy may be cut to reflect the rating you desire (no violence, dirty language okay). Aspirin is free, but aspirin tailored to your DNA is very expensive. As many have noted, personalization requires an ongoing conversation between the creator and consumer, artist and fan, producer and user. It is deeply generative because it is iterative and time consuming. You can’t copy the personalization that a relationship represents. Marketers call that “stickiness” because it means both sides of the relationship are stuck (invested) in this generative asset, and will be reluctant to switch and start over.

Interpretation — As the old joke goes: software, free. The manual, $10,000. But it’s no joke. A couple of high profile companies, like Red Hat, Apache, and others make their living doing exactly that. They provide paid support for free software. The copy of code, being mere bits, is free — and becomes valuable to you only through the support and guidance. I suspect a lot of genetic information will go this route. Right now getting your copy of your DNA is very expensive, but soon it won’t be. In fact, soon pharmaceutical companies will PAY you to get your genes sequence. So the copy of your sequence will be free, but the interpretation of what it means, what you can do about it, and how to use it — the manual for your genes so to speak — will be expensive.

Authenticity — You might be able to grab a key software application for free, but even if you don’t need a manual, you might like to be sure it is bug free, reliable, and warranted. You’ll pay for authenticity. There are nearly an infinite number of variations of the Grateful Dead jams around; buying an authentic version from the band itself will ensure you get the one you wanted. Or that it was indeed actually performed by the Dead. Artists have dealt with this problem for a long time. Graphic reproductions such as photographs and lithographs often come with the artist’s stamp of authenticity — a signature — to raise the price of the copy. Digital watermarks and other signature technology will not work as copy-protection schemes (copies are super-conducting liquids, remember?) but they can serve up the generative quality of authenticity for those who care.

Accessibility — Ownership often sucks. You have to keep your things tidy, up-to-date, and in the case of digital material, backed up. And in this mobile world, you have to carry it along with you. Many people, me included, will be happy to have others tend our “possessions” by subscribing to them. We’ll pay Acme Digital Warehouse to serve us any musical tune in the world, when and where we want it, as well as any movie, photo (ours or other photographers). Ditto for books and blogs. Acme backs everything up, pays the creators, and delivers us our desires. We can sip it from our phones, PDAs, laptops, big screens from where-ever. The fact that most of this material will be available free, if we want to tend it, back it up, keep adding to it, and organize it, will be less and less appealing as time goes on.

Embodiment — At its core the digital copy is without a body. You can take a free copy of a work and throw it on a screen. But perhaps you’d like to see it in hi-res on a huge screen? Maybe in 3D? PDFs are fine, but sometimes it is delicious to have the same words printed on bright white cottony paper, bound in leather. Feels so good. What about dwelling in your favorite (free) game with 35 others in the same room? There is no end to greater embodiment. Sure, the hi-res of today — which may draw ticket holders to a big theater — may migrate to your home theater tomorrow, but there will always be new insanely great display technology that consumers won’t have. Laser projection, holographic display, the holodeck itself! And nothing gets embodied as much as music in a live performance, with real bodies. The music is free; the bodily performance expensive. This formula is quickly becoming a common one for not only musicians, but even authors. The book is free; the bodily talk is expensive.

Patronage — It is my belief that audiences WANT to pay creators. Fans like to reward artists, musicians, authors and the like with the tokens of their appreciation, because it allows them to connect. But they will only pay if it is very easy to do, a reasonable amount, and they feel certain the money will directly benefit the creators. Radiohead’s recent high-profile experiment in letting fans pay them whatever they wished for a free copy is an excellent illustration of the power of patronage. The elusive, intangible connection that flows between appreciative fans and the artist is worth something. In Radiohead’s case it was about $5 per download. There are many other examples of the audience paying simply because it feels good.

Findability — Where as the previous generative qualities reside within creative digital works, findability is an asset that occurs at a higher level in the aggregate of many works. A zero price does not help direct attention to a work, and in fact may sometimes hinder it. But no matter what its price, a work has no value unless it is seen; unfound masterpieces are worthless. When there are millions of books, millions of songs, millions of films, millions of applications, millions of everything requesting our attention — and most of it free — being found is valuable.

The giant aggregators such as Amazon and Netflix make their living in part by helping the audience find works they love. They bring out the good news of the “long tail” phenomenon, which we all know, connects niche audiences with niche productions. But sadly, the long tail is only good news for the giant aggregators, and larger mid-level aggregators such as publishers, studios, and labels. The “long tail” is only lukewarm news to creators themselves. But since findability can really only happen at the systems level, creators need aggregators. This is why publishers, studios, and labels (PSL)will never disappear. They are not needed for distribution of the copies (the internet machine does that). Rather the PSL are needed for the distribution of the users’ attention back to the works. From an ocean of possibilities the PSL find, nurture and refine the work of creators that they believe fans will connect with. Other intermediates such as critics and reviewers also channel attention. Fans rely on this multi-level apparatus of findability to discover the works of worth out of the zillions produced. There is money to be made (indirectly for the creatives) by finding talent. For many years the paper publication TV Guide made more money than all of the 3 major TV networks it “guided” combined. The magazine guided and pointed viewers to the good stuff on the tube that week. Stuff, it is worth noting, that was free to the viewers. There is little doubt that besides the mega-aggregators, in the world of the free many PDLs will make money selling findability — in addition to the other generative qualities.

These eight qualities require a new skill set. Success in the free-copy world is not derived from the skills of distribution since the Great Copy Machine in the Sky takes care of that. Nor are legal skills surrounding Intellectual Property and Copyright very useful anymore. Nor are the skills of hoarding and scarcity. Rather, these new eight generatives demand an understanding of how abundance breeds a sharing mindset, how generosity is a business model, how vital it has become to cultivate and nurture qualities that can’t be replicated with a click of the mouse.

In short, the money in this networked economy does not follow the path of the copies. Rather it follows the path of attention, and attention has its own circuits.

Read more from Kevin Kelly here.

Kevin Kelly has written extensively on the need to create value around digital copies in order to create the revenue opportunities that are falling away every day for digital media. Here is an excerpt from his great essay “Better Than Free”.

Eight Generatives Better Than Free

Immediacy – Sooner or later you can find a free copy of whatever you want, but getting a copy delivered to your inbox the moment it is released — or even better, produced — by its creators is a generative asset. Many people go to movie theaters to see films on the opening night, where they will pay a hefty price to see a film that later will be available for free, or almost free, via rental or download. Hardcover books command a premium for their immediacy, disguised as a harder cover. First in line often commands an extra price for the same good. As a sellable quality, immediacy has many levels, including access to beta versions. Fans are brought into the generative process itself. Beta versions are often de-valued because they are incomplete, but they also possess generative qualities that can be sold. Immediacy is a relative term, which is why it is generative. It has to fit with the product and the audience. A blog has a different sense of time than a movie, or a car. But immediacy can be found in any media.

Personalization — A generic version of a concert recording may be free, but if you want a copy that has been tweaked to sound perfect in your particular living room — as if it were preformed in your room — you may be willing to pay a lot. The free copy of a book can be custom edited by the publishers to reflect your own previous reading background. A free movie you buy may be cut to reflect the rating you desire (no violence, dirty language okay). Aspirin is free, but aspirin tailored to your DNA is very expensive. As many have noted, personalization requires an ongoing conversation between the creator and consumer, artist and fan, producer and user. It is deeply generative because it is iterative and time consuming. You can’t copy the personalization that a relationship represents. Marketers call that “stickiness” because it means both sides of the relationship are stuck (invested) in this generative asset, and will be reluctant to switch and start over.

Interpretation — As the old joke goes: software, free. The manual, $10,000. But it’s no joke. A couple of high profile companies, like Red Hat, Apache, and others make their living doing exactly that. They provide paid support for free software. The copy of code, being mere bits, is free — and becomes valuable to you only through the support and guidance. I suspect a lot of genetic information will go this route. Right now getting your copy of your DNA is very expensive, but soon it won’t be. In fact, soon pharmaceutical companies will PAY you to get your genes sequence. So the copy of your sequence will be free, but the interpretation of what it means, what you can do about it, and how to use it — the manual for your genes so to speak — will be expensive.

Authenticity — You might be able to grab a key software application for free, but even if you don’t need a manual, you might like to be sure it is bug free, reliable, and warranted. You’ll pay for authenticity. There are nearly an infinite number of variations of the Grateful Dead jams around; buying an authentic version from the band itself will ensure you get the one you wanted. Or that it was indeed actually performed by the Dead. Artists have dealt with this problem for a long time. Graphic reproductions such as photographs and lithographs often come with the artist’s stamp of authenticity — a signature — to raise the price of the copy. Digital watermarks and other signature technology will not work as copy-protection schemes (copies are super-conducting liquids, remember?) but they can serve up the generative quality of authenticity for those who care.

Accessibility — Ownership often sucks. You have to keep your things tidy, up-to-date, and in the case of digital material, backed up. And in this mobile world, you have to carry it along with you. Many people, me included, will be happy to have others tend our “possessions” by subscribing to them. We’ll pay Acme Digital Warehouse to serve us any musical tune in the world, when and where we want it, as well as any movie, photo (ours or other photographers). Ditto for books and blogs. Acme backs everything up, pays the creators, and delivers us our desires. We can sip it from our phones, PDAs, laptops, big screens from where-ever. The fact that most of this material will be available free, if we want to tend it, back it up, keep adding to it, and organize it, will be less and less appealing as time goes on.

Embodiment — At its core the digital copy is without a body. You can take a free copy of a work and throw it on a screen. But perhaps you’d like to see it in hi-res on a huge screen? Maybe in 3D? PDFs are fine, but sometimes it is delicious to have the same words printed on bright white cottony paper, bound in leather. Feels so good. What about dwelling in your favorite (free) game with 35 others in the same room? There is no end to greater embodiment. Sure, the hi-res of today — which may draw ticket holders to a big theater — may migrate to your home theater tomorrow, but there will always be new insanely great display technology that consumers won’t have. Laser projection, holographic display, the holodeck itself! And nothing gets embodied as much as music in a live performance, with real bodies. The music is free; the bodily performance expensive. This formula is quickly becoming a common one for not only musicians, but even authors. The book is free; the bodily talk is expensive.

Patronage — It is my belief that audiences WANT to pay creators. Fans like to reward artists, musicians, authors and the like with the tokens of their appreciation, because it allows them to connect. But they will only pay if it is very easy to do, a reasonable amount, and they feel certain the money will directly benefit the creators. Radiohead’s recent high-profile experiment in letting fans pay them whatever they wished for a free copy is an excellent illustration of the power of patronage. The elusive, intangible connection that flows between appreciative fans and the artist is worth something. In Radiohead’s case it was about $5 per download. There are many other examples of the audience paying simply because it feels good.

Findability — Where as the previous generative qualities reside within creative digital works, findability is an asset that occurs at a higher level in the aggregate of many works. A zero price does not help direct attention to a work, and in fact may sometimes hinder it. But no matter what its price, a work has no value unless it is seen; unfound masterpieces are worthless. When there are millions of books, millions of songs, millions of films, millions of applications, millions of everything requesting our attention — and most of it free — being found is valuable.

The giant aggregators such as Amazon and Netflix make their living in part by helping the audience find works they love. They bring out the good news of the “long tail” phenomenon, which we all know, connects niche audiences with niche productions. But sadly, the long tail is only good news for the giant aggregators, and larger mid-level aggregators such as publishers, studios, and labels. The “long tail” is only lukewarm news to creators themselves. But since findability can really only happen at the systems level, creators need aggregators. This is why publishers, studios, and labels (PSL)will never disappear. They are not needed for distribution of the copies (the internet machine does that). Rather the PSL are needed for the distribution of the users’ attention back to the works. From an ocean of possibilities the PSL find, nurture and refine the work of creators that they believe fans will connect with. Other intermediates such as critics and reviewers also channel attention. Fans rely on this multi-level apparatus of findability to discover the works of worth out of the zillions produced. There is money to be made (indirectly for the creatives) by finding talent. For many years the paper publication TV Guide made more money than all of the 3 major TV networks it “guided” combined. The magazine guided and pointed viewers to the good stuff on the tube that week. Stuff, it is worth noting, that was free to the viewers. There is little doubt that besides the mega-aggregators, in the world of the free many PDLs will make money selling findability — in addition to the other generative qualities.

These eight qualities require a new skill set. Success in the free-copy world is not derived from the skills of distribution since the Great Copy Machine in the Sky takes care of that. Nor are legal skills surrounding Intellectual Property and Copyright very useful anymore. Nor are the skills of hoarding and scarcity. Rather, these new eight generatives demand an understanding of how abundance breeds a sharing mindset, how generosity is a business model, how vital it has become to cultivate and nurture qualities that can’t be replicated with a click of the mouse.

In short, the money in this networked economy does not follow the path of the copies. Rather it follows the path of attention, and attention has its own circuits.

Read more from Kevin Kelly here.

Another post from my co-author Gerd Leonhard.

“What are the new, web-native, social & inter-connected business models that will power the future of content creators and their industries?

In 2008, the disruptive force of the Internet finally hit home, and – as is usually the case – it all came much later than we had estimated but the disruption was also much bigger than expected. A quick look at some trends in this context:

* Newspaper revenues are seriously down (25% in some cases); and magazines and other print media are severely challenged, as well
* Digital music revenues are still going up, overall, but very very very far from enough to stop the free-fall of the recorded music industry, in general (approx 20%, globally, would be my estimate for 2008) *pennies for $$, see below
* DVD sales are declining, worldwide, prices are falling, too – and this will only accelerate next year
* Online video views and audiences are up a lot – but so far pretty much everybody has trouble making any real money with online video

“My hunch is that the Internet may well – and soon – bring us an utterly scary reduction of traditional content models that is somewhere in the neighborhood of 1:5, i.e. if you keep relying on the old ‘disconnected’ content revenues models you may eventually see only 1/5th of the financial returns that you had before. This could vary by industry, location and context, of course, but I would dare say that if you stick to your old models the future will be bleak, either way – and this goes for the actual creators but even much more so for the businesses that are build around them.

To me, the bottom line is that most of what used to work just fine in a disconnected world of ‘totally segregated consumers and producers’ will simply not work in the future.

This is why I think 2009 will be year of:

* Totally exploding consumer / user / fan / listener / viewer empowerment (yes, you ain’t seen nothing yet – wait until 2 Billion + people are wirelessly connected via increasingly smart and easy-to-use mobile devices)
* Re-inventing content commerce (such as: charge for access… not just units, bundle content into access, freemium etc)
* Re-evaluating copyright as that sacrosanct, sole, principal, or even main driver of revenue – the solution for what I like to call ‘digital payment-refusal’ aka piracy is not a technological issue but a business problem
* Re-inventing advertising (since new kinds of advertising will no doubt be one of the future drivers of content commerce, as well)
* Getting the telecoms and network operators aboard – for they can’t make it work without content, either!

I do have a hunch that this old Chinese proverb holds a part of the solution: “Tell me and I’ll forget; show me and I may remember; involve me and I’ll understand.”

Read the whole thing from Gerd Leonhard here.

Here is an excellent post by Gerd Leonhard that is well worth repeating.

“We are indeed heading into a future of Attention Revenues exceeding Copy Revenues – and I am talking within 3-4 years here, and probably much sooner in Asia where ’selling copies’ has never been the #1 money maker for content creators.

A Future where all kinds of attention-based revenues (i.e. not just advertising-as-we-knew-it but revenue sharing of flat-rate offerings, next-generation ‘2.0′ advertising, up-stream selling and marketing, sponsorships and branding, linking and referring, etc) will very likely surpass copy & unit-sales revenues. A Future where many content creators of all kinds, in all locations, and within all levels of accomplishment will make more money based on what their brand stands for, based on their fans aka users having real, meaningful experiences with or through them, and based on who pays attention to them, when and where.

Selling enough copies of one’s work (whether physical or digital, whether books, songs, movies, software or games) to make this the sole pillar of one’s livelihood has in reality always been reserved to those very few creators that are at the top of the heap (i.e. not in the so-called longtail or even the body). And of course, being hit-driven, the companies that have marketed those that can sell millions of copies globally are the ones who will have the most to lose in the short term and during this paradigm switch-over – Hollywood’s latest disaster movies are not going to be themost-watched movies in India, China and Brazil in the future, anymore.

In our immediate future as content creators and companies that serve them, it’s all about gathering and converting Attention – at least until the world is so well-served with feels-like-free content in return for attention that physical copies become desirable again (and they will).

Most musicians and songwriters will make more money with performance-related activities (i.e. concerts, web-casts, life-streams, on-demand and regular Radio, TV, synchronization, sound branding, music in public spaces, etc) then with selling copies of songs or albums. In fact, in less than 3-4 years it probably won’t matter anymore whether it’s deemed a copy or a stream since all content will be available in the network cloud, anyway, and it will be Access that counts, not if it’s a copy or copy – at least if you’re not a recording industry lawyer. We are already seeing this trend if we look at the steadily increasing revenues of public performance organizations (such as ASCAP, BMI, BUMA etc) while observing the rest of the recorded industry’s unit-selling revenues (and so-called mechanical revenues) heading for the vaporizer.

Of course, most book authors (and there are increasingly many – with an estimated 3000 new books published per day) already know that the real money in writing books is not in selling them. Instead – just like with free / open-source software creators – it’s in the increased reputation, in the bolstered credibility, in the enhanced public perception where the income is: book authors get hired to speak, ask to sit on boards of companies, join academic organizations, advise governments, provide input on film and TV productions, and so on. While nothing new, this is a nice example for the rising importance of the Attention Economy: a lot more people can now become their own publishers and can have a go at becoming Author-Brands; the gates are now wide open to either prove yourself or be demolished by your peers (yes… it does work both ways).

The likes of Twitter, Friendfeed, Google, Amazon and Youtube have now given all of us a fairly reliable way of checking what a writer’s reputation and buzz is – and faking it will become nearly impossible to do. The reality is, of course, that 99% of book authors have nowhere to go but up: their revenues from unit sales never did amount to a meaningful income, anyway, so if Attention Revenues are the way forward… it’s all up from here.

Film-makers and TV/Video producers have a lot to gain from this switch to attention-based revenues, as well, even though high production costs will be initially hard to justify for small, niche audience productions – as many web-based TV startups have found out, there is no real money in the long-tail TV/video market yet; mostly because only 3% of the world is on broadband at this time, and those that are are paying too much for it (imho). But let’s keep in mind that public performance (i.e. showings) of motion pictures, TV shows and videos have always generated a very large part of the cash that came in: box office revenues are, after all, nothing but performance i.e. converted attention-based revenues — selling the experience not the copy. And as this won’t change in the future, the movie industry still has a real leg up on the music business.

So let’s take a look how creators (and even their representatives) can turn attention into real cash:

* Public Performance (whether in person or through an increasing choice of media)
* Contributions to other productions (contract work, licenses, remixes etc)
* Endorsements by sponsors and brands (that’s pretty much how the music industry in China does it)
* Referring, linking and connecting to others (generating affiliate and referral fees)
* Lending Credibility and adding value by their participation (events, campaigns etc)
* Generating an increasing number of new up-stream revenues – once you have attention there are many ways to upsell your users to the next level of engagement!

Read the whole post from Gerd Leonhard here.

This guy is always so over the top, but he delivers the message.

“What happens when the labels stop paying an advance?

You know that’s gonna happen. With such limited revenue from recorded music, no one’s going to pay you a fortune to make it. There’s no incentive. Live Nation might pay you a fortune to TOUR, but who, in their right mind, is going to pay you a few hundred k when the only thing selling is singles? Hell, not one album released this year has yet gone PLATINUM! Do you expect Universal to be ponying up millions of dollars in the future?

Don’t be surprised if the major labels morph into management companies. In a way, they already have. That’s what a 360 deal is. That’s what the manager has ALWAYS had, a share in all revenue streams. You only get paid if there’s success. Are the majors going to follow this paradigm?

Of course, there could be a bidding war, generating large advances, but Live Nation/Ticketmaster is always going to win that one. Until the majors merge with a touring company, they’re fucked, they just don’t have enough to offer, their costs are too high, their margins too thin. If I were a major, I’d be calling Jerry and Arny, maybe even Seth right now. After calling Phil Anschutz, of course. In order to survive, labels have to play in the touring arena.

But the foregoing is all about money. Don’t you realize that’s what the album was about, money? That’s how you got paid, by delivering an album. Of course the public didn’t know this, but this was the game for eons. Sure, the Beatles made a STATEMENT with “Sgt. Pepper”, but Capitol was more interested in the revenue. Selling 33’s was much more profitable than selling 45’s. And the high-priced/low royalty CD was even more of a moneymaker than the LP record. That’s how we got here. Pure greed, not artistry.

If you want to record a full-length statement, be my guest. I see nothing wrong with that. But are you really interested in laying down ten tracks on wax if you’re not going to trigger a payment?

Please don’t be blinded by history. If your goal is to make money, and seemingly everybody e-mailing me is focused on bucks, how are you going to make money in the future? I’ll tell you. The public is your bank. And people don’t pay solely for recorded music, they may not pay for recorded music at all. How are you going to get paid?

By building an audience.

An album’s worth of material usually does not build an audience. A TRACK builds an audience. If you’re a career artist, people will want more tracks. But only if they’re good.

So the focus is no longer on cutting ten songs, but cutting GOOD songs! There’s an unlimited audience for GREAT songs. Still, how do you nurture your audience?

Playing every night in a single town is not going to build heat. You’ve got to go away for a while to increase demand. But you can’t go away for TOO LONG or you’ll be forgotten. Same deal with music. How do you deliver enough to keep people interested, but not too much to overload them?

DON’T tell me how much you love albums. That’s like labels saying no one will ever download music from the Internet. The album is history, you just don’t know it yet. STATEMENTS are not history, but are you really making a statement?

Innovate in the new sphere.

If U2 weren’t getting paid by Universal upon delivery of an album, they’d be better off releasing tracks in fits and starts. You get continuous publicity. AND, the way they just did it didn’t work, the album’s sales are small. Imagine going on Letterman EVERY MONTH, not for a week straight. BUILDING, instead of blowing your wad.

Imagine rewarding a fan who buys all ten tracks over the course of months. Maybe buying all ten delivers a code that allows you to purchase guaranteed good seats at the pre-sale. Maybe there’s a quiz regarding the content that allows people to qualify.

Maybe when you do that commercial endorsement, the reward is someone can go to the company’s Website and download YOUR NEW SONG! The insta-collection of ten tracks is no longer the starting point, rather you dole out your tracks in drips and drabs, making each release a minor marketing event, that keeps people interested, that keeps them going to the show.

If you’re a star, maybe you announce that you’re going to play the new track at the top of every show. And maybe then not again for a YEAR! So you’ve got to download to be familiar, and come if you want to hear it live. Don’t you see? Giving up the album delivers FREEDOM!

No one says a fan can’t create a playlist of ten tracks that he plays ad infinitum. Maybe the fan creates the album, and posts it to your Website, delineating why he picked this running order, imploring you to play these tracks in this order live. Hell, if the album were such a defined success, how come almost no act plays their latest opus straight through at a gig? BECAUSE ALMOST NO ONE CARES!

People don’t know the music. They want to hear some old stuff too. Just like you do when you make an iTunes playlist. You mix it up. Why shouldn’t the artist mix it up?

As for Record Store Day… How laughable is that. If you’re salivating over this, you’re living in 1990, and hoping we go back to 1970. Record stores are dead. As dead as your Apple II. Some will survive, as dealers in antiquities and tchotchkes, but essentially everyone will buy online.

Point being, how can you lambaste Doug Morris for missing the digital revolution when you too are stuck in the past?

People only want to hear good music. On demand. This has decimated radio. But the album went first. We’re just feeling the full effect now. And it’s only going to get worse.

Newspapers saw a crisis coming. But they figured it was always in the future. That crisis is now. Newspapers will probably not survive. I get three a day. But I know the paradigm is history. I lament the loss, but look forward to the future, wherein more people report upon more stories in a constant 24 hour news cycle.

You too should look to the future. Not one in which you deliver product to get paid by a middleman, but one in which you and your handlers are all in it together, and you build an audience fan by fan, which lasts. Toyotas were a joke in 1970. Now GM is a joke. Toyota built its brand based on reliability, word of which was spread slowly from mouth to mouth. Toyota took decades to surpass GM as the largest automobile company in the world, but GM will never regain the crown.

So don’t tell me about ancient paradigms. Please look to the future. It’s coming. It’s about great. Fans want more music by the acts they adore. Release all the live stuff, all the alternative versions. They don’t taint the original, they allow fans to burrow deeper, the revealing of all your warts burnishes your image!

We live in an information society. That’s what your fans want, information. They don’t want a CD dropped every few years with canned hype, they want continuous info. Don’t get locked into the album syndrome. You’re missing the future.”

- From The Lefsetz Letter

By Dave Kusek

I actually think the possibilities of making a living in art today are as good, or perhaps better, than ever before primarily because of the communication tools that we have online and the ability to develop relationships with the audience. I think the juice is in the do-it-yourself area of a sole-proprietor musician or a band or a writer on their own or with a publishing company, trying to figure out how they can penetrate the market, make a living, and break through the noise without all the traditional trappings, because all of that is pretty much gone for most people. The opportunity is really in the redefinition of how you go to market with music on a much smaller scale and develop a user base. That’s really where the action is.

From the recorded music side, the reality of the past 50 or 70 years is that a few percent of the people involved in recording ever made any real money off the records. Just a few percent! And if you made any money at all, it was through your songwriting or your touring or your merchandise, or something else that you came up with to provide you with a living. So on one hand, things are not all that different than they’ve ever been, in that you’re not going to make a ton of money making recordings and you never were. The reality is nobody is going to take care of you—you have to do it yourself or you have to form a small team around you to help.

We’ve just begun to scratch the surface of live, interactive experiences enabled by communications technologies—the smart phone, the internet, the broadband connections that we have—where you can create musical experiences between you and a relatively small group of people. Everyone is saying that the concert can’t be digitized, so at the moment that remains a reasonable way for people to make a living where the majority of your income comes from touring. And if you think about interactive experiences that can be created—virtual living room tours, behind the scenes events, having people participate in writing parties or creating music on the fly to suit the audience that you happen to be connected to—I think there are a number of wildcards in there where people have begun to experiment with mapping the live experience onto a communications network. There’s a long way to go there and there’s a lot of opportunity, especially as you see the iPhone and the Google phone and some of the devices from Nokia and others that are giving you video-enabled computers connected to the internet in the palm of your hand. That allows for the distribution of content at a very high level and interaction with your audience that you really never had before, on that one-to-one level or one-to-a-few level. And by making it mobile, you’re getting away from your fan having to be sitting at a desk in front of a computer. As people begin to write for that platform and that potential, I think we’ll see a lot of innovation.

And you can monetize that. I think people will pay for access to artists that they enjoy, and they will help support artists that they respect if they know that most, if not all, of the money is going directly to the artist rather than to the combine. If you have 5,000 fans willing to pay $20 a year for access to your music and the ability to participate and interact with you, there’s a nice pool of money for you to make a living off of. If that blows up to 100,000 people, you’ve got tremendous potential there.

What is your definition of success? That definition tends to be all over the place, but what do you need to sustain yourself in order to focus on your art fulltime? Can you live on $60,000 or $80,000 or $100,000? Probably. Can you make that kind of income writing music, performing regionally, licensing your music into various outlets? Yes, you can. If you focus on creating a career at that level, it’s entirely possible and many people are doing it using the tools that we have today. Instead of chasing the brass ring, you’re just basically trying to be a middle class artist making a middle class income. If you’re realistic about your expectations, you can make a living and spend most of your time focused on your art, whether it’s writing or performing or recording or drawing or painting of photography. It’s certainly possible—way more possible than being famous was ever going to be. You need to think through that because it’s really probably the only opportunity that most people are going to have in this environment—keep reasonable expectations and build up a little business around yourself that’s not grand scale but human scale.

One of the things that I think is holding a lot of this back is it’s very difficult to license music for global consumption. You’ve got to figure out who the rights holders are at every country, there’s often a publishing side and a recorded master side, there may be multiple writers, and the control that has dominated the industry for so long is holding us back. I think it’s something that people need to pay attention to: How can copyright law better serve artists in the digital age and what the digital age will bring?

The record companies have felt the pain of the changes in the marketplace ahead of the publishers. And you can see that the record companies are beginning to change their approach and they’re more willing to experiment because their revenue is down 50% and they’re absolutely scared to death. The publishers are following behind that curve and in my opinion are the larger road block in making deals than the record companies are. So having publishers look at their record company friends and what they’ve gone through and avoiding that is really key to remaining relevant.

With all of these interaction opportunities and non-traditional distribution opportunities, if we had better licensing, easier licensing, more transparent licensing, a more global approach, potentially everyone could make more money. If we stick to the laws the way they are and the sort of country-by-country rights, people who are in that camp will have a disadvantage against new artists who decide to open up their rights with a Creative Commons approach or perhaps another blanket licensing approach. If it becomes easier to license new music from new composers than it is the old composers, guess who’s going to win?

This interview with Dave Kusek originally appeared in New Music Box.

Here is a rather lengthy presentation on Trent Reznor and NIN and how they represent the future of music from TechDirt’s Mike Masnick. This case study outlines the experiments and business models being explored by this forward thinking artist.

Leadership Music Digital Summit 2009 – Mike Masnick keynote address, 3/25/09 from Leadership Music Digital Summit on Vimeo.

Also here is a demo of the iPhone App that NIN has planned that Apple rejected today because it streams a song with profanity in it. Really Apple, get a life. This guy is one of the biggest innovators in music today and your process for getting Applications developed and approved for the iPhone need VAST improvement.

NIN: Access iPhone app walkthrough with Trent Reznor, Rob Sheridan, and special guest Kevin Rose from Nine Inch Nails on Vimeo.

Great collection of characters commenting on free music from Hypebot.

Inspired by the coming release of Chris Andersen's book Free: The Future of a Radical Price, we've been exploring the importance of free music. There is no debating that free is here, but the discussion as to how to use free music, even how to monetize it, has just begun.

Last week's posts sparked a lively debate among readers and in other publications. Ex-Coolfer blogger Glenn Peoples, now at Billboard, wrote an extensive essay "The Free Debate" noting that, "as companies search for new ways to monetize recorded music, expect free music to be a common theme" and went on to quote several of the "Free Thinkers" who graciously wrote essays on Hypebot last week. I'd like to thank each of those contributors and Hypebot's smart and opinionated readers for adding to this important discussion. Take a minute to read any that you missed.

• Kyle Bylin: FREE!: The Kind of Music Nobody Wants To Own
• Virgil Dikerson:"You Can Always Go Back To School"
• Kevin Kelly: "Sell things that can't be copied."
  
• FREE THINKERS – The Industry Talks About Free

• Video: Chris Anderson On 4 Kinds Of Free
• Free Music Only Has Value If…

Online journal, New Music Box just published a collections of essays on the future of music. Here are some excerpts:

Recording. Performance. Distribution. Copyright. Publishing. When the most basic terms of your field are in flux, it can be hard to see to next month, let alone into the next year, or to prepare for the next decade. Would you have expected music to be where it is today if you had been asked in 1999?

Amanda MacBlane writes, “In 1999, I was 19 and Napster had just launched. Computers, old midi devices, turntables and lots of samples were the building blocks of many of our dorm room compositions. I came early to the blogosphere and the social networks, and I jonesed for a giant iPod. I was a true believer in technology: new sounds, new ways of making music, new ways of hearing it, new ways of talking about it and new ways of getting it. I would proselytize anyone who would listen.

But as the technology became ubiquitous, my enthusiasm waned. Perhaps it was overkill or, as a proud non-conformist, it was painful to see my “originality” boiled down to some market research figures. Maybe it’s simply because I am getting fixed in my ways.

Don’t get me wrong. I do love the discovery aspect of the Internet. I love that technology has inspired so many people to make music and share it, even if I am not a huge fan of the mash-up. Most of all, I love the possibility of having access to every piece of music ever recorded or movie made from my apartment without having to have shelves specially built.

But I also think Twitter is stupid, that the Long Tail is bunk, and that Pandora has no idea about my musical taste (once it actually told me it had no more suggestions for me). As I spend more time in conference rooms, I am always disheartened by the buzz phrases: Brave New World, access vs. units, monetization and the worst one of all—content. Art is taboo in these places.

Yet having spent time with people on all sides of the situation, I have gained insight into where musical life is headed and had a chance to meditate on my own musical values. Here are just a few of the thoughts that have been floating around in my head:

1/ Music will always make money, but not always for the same people. Whether it’s the record companies or the Internet giants, we just need to make sure that the composer and the musician don’t get cut out of the deal. Of course touring and merchandise will help, but other companies whose business models are founded on music—selling it, streaming it, sharing it, storing it, copying it—need to share their profits with those that create it.

2/ We desperately need flexible, worldwide licenses for music. The Internet has no borders, so why do our licenses? Because as soon as anything becomes worldwide, it becomes as wonky as the UN. Rights holder organizations have been working to achieve this, but a 2004 decision by the European Commission’s Competition Directorate halted a first initiative for worldwide, blanket licenses for the entire world’s musical repertoire. Another anti-competition decision (2008) against European societies spurred by powerful broadcasters looking for cheaper royalties has forbid societies from working together. It’s hard to create a worldwide license for the world repertoire on a national basis. Until the EU is on board, this won’t be possible.

3/ Let’s not leave promotion or guidance to algorithms. Having access to every piece of music ever recorded is great but also very overwhelming. For musicians, how do you get noticed? As a listener without hours of free time, how do you find your next favorite piece? I don’t think a computer algorithm can ever replace the human promoter or guide. We need to facilitate journalism, web radio, podcasts and well-constructed multimedia blogs as well as any new ways of talking about music. This goes back to the licensing issue in part—some of these outlets won’t make much money at all and there need to be licenses available that do not make it impossible for them to operate.

4/ Technology can never replace the physical and social act of making music. Even in my technology-loving heyday, my professor of Electronic Music, David Borden, insisted that our final piece include a live performance element. Listening to music is great and composing for the computer can certainly be exciting, but the music that means the most to me is that which I have physically performed and shared with others. No computer or killer app can match performing Bach’s B-minor Mass in Caracas with some of my best friends or playing 4-handed piano duets with my mom.

5/ Music education in our schools cannot be abandoned. We can’t democratize production and distribution while limiting access to musical training. Not only will music education help lots of talented kids move past the mash-up, it also helps people appreciate the value of music and the work it takes to do it well. Whatever happens, one thing is for sure: People will always make music and that is very comforting to me.

Read more from New Music Box. Welcome to the Future.