21 april 2023

How the legal digital B2C music distribution don´t work

1999-2008

Digital legal music split

• Digital legal sales Online – Mobile (incl ringtones)

• Japan 7% - 93%• Germany 50% - 50%• France 40% - 60%• UK 50% - 50%• USA 66% - 34%

Digital musik distribution = fucked up?

Web legal music sales

• 1. iTunes B2C• 2. • 3. • 4. allmp3.com B2C• 5. eMusic B2C

• The rest:• Napster B2C• Different ISP B2B• OD2 B2B• others

Digital musik distribution = fucked up?

iPod player 75% marknadsandel WW – Europa 60%

Digital musik distribution = fucked up?

Over 75% web share

iTunes

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iTunes & iPod:

- 2 000 000 000 iTunes software download (2 000 millioner!)- 6 000 000 000 tracks sålda på iTunes (6 billion!)- iTunes är No.1 Digital Music butik in alla 24 länder man finns- Alla 24 butiker erbjuder 7 000 000 olika låtar- Nr. 1 totala musikbutik i USA före kedjan WalMart- 500 000 000 TV shower för iPod Video sålda (500 million!)- 35% av all music i iTunes är ENDAST tillgängligt digitalt, ej på CD

200 000 000 iPods sålda (200 million!) betyder

30 legalt köpta låtar innehåller alla iPods(vad är resten?)

Digital musik distribution = fucked up?

Endast USA + UK

Napster

Digital musik distribution = fucked up?

= massiv flopp = stängt = stora MS cash till skivbolagen å inget till artisterna

Microsoft + MTV = Urge

Skivbolagmassivaförskott

Digital musik distribution = fucked up?

YouTube och MySpace nu i kinesiska versioner...

Top100.cn Störst i Kina

En blandning av licensierade och icke-licensierade låtar…

Har nu GOGGLE – DEALEN!

Digital musik distribution = fucked up?

Temporärt stoppad av IFPI

Allofmp3.com

Ryssland

50 öre per låt

Var nr 2 i Europa

Inga labellicenser

Digital musik distribution = fucked up?

MySpaceMusic

J/V medSonyBMGUniversalWarner

Aktier !!!Hur avräknadet till artister?

Indie bolagöverkörda

Digital musik distribution = fucked up?

60 miljoner dagliga besök300 miljoner dagliga video streams

Digital musik distribution = fucked up?

p2p• LimeWire• eDonkey• BearShare• WinMX• Grokster• Vid varje tidpunkt har man 10 000 000 = 10 million personer uppe och delar samtidigt• och BitTorrent clients är Nr. 1.

•63% av alla 14-24 svenskar nedladdar p2p•80% av dom skulle tänka sig betala för legal p2p

• PINK CHAMPAGNE = den illegala Topplistan

Digital musik distribution = fucked up?

Instant Message är dock troligen större än p2p

• msn messenger

”mailar över en låt” = olagligt men ingen bryr sig eller fattar det….

Digital musik distribution = fucked up?

Digital musik framtids planering 1998 ff:

Säkerställ:

1.Bryt den svaga länken i CD värde kedjan

2.Kontrollera all distribution och försäljningserbjudande

3.Se till att få betalt först

4.Undvik gamla avtals 50/50 split

Digital musik distribution = fucked up?

Resultat räkning digital web musik försäljning

• Pris till konsument 100 %• Stora skivbolagens licens andel 70 %• Avräkning till musikförlag 10%•Teknik fixaren 10%

• marginal för web butiken 10%

- Kraftiga förskott till stora skivbolag (troligen ej artist avräknat)

- Youtube försäljning- MySpace Music set-up

Digital musik distribution = fucked up?

Resultat räkning digital web musik försäljning

• Pris till konsument 100 %• Små skivbolagens licens andel 50 %• Avräkning till musikförlag 10 %•Teknik fixaren 10 %

• Marginal för web butiken 30 %

- Inga förskott till små skivbolag - därav SOM/Impala/Merlin försök- utanför MySpace Music set-up

Hur funkar då den digitala musik distributionen?

UNI25,5%

B2B White Label 3rd PartyAggregator:

Labelse-tailers

???

EMI13,4%

WEA11,3%

Indies28,4%

SonyBMG21,5%

msn

fnac

Musicload

Tiscali

OUT

?

Musicfans

Major label worldwide digital distribution centre

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BHur funkar då den digitala musik distributionen?

UNI25,5%

iTunes överallt

Labels

- iTunes worldwide

???

EMI13,4%

WEA11,3%

Indies28,4%

SonyBMG21,5%

OUT

CD Baby

Musicfans

= 4 000 000 000+ låt downloads, huge ”promos”

Sverige behöver ett phonofile!

Sverige behöver ett phonofile!

Sverige behöver ett phonofile!

Varför exploderar inte den legala digitala musik distributionen?

Har vi gett konsumenter en bättre ”shopping experience” ?

• Kaffe - Starbucks• Möbler - Ikea• Aktiehandel - internet banker• Skivbutiker - Web nedladdning ????

Konsumenter vill ha flexibla, enkla att använda tjänster med konkurrenskraftiga priser.

Varför exploderar inte den legala digitala musik distributionen?

Downloading = en underbar ”shopping experience”?

• Registrera namn, adress mm• Oftast endast kreditkorts betalning• Du äger inte musiken pga DRM• DRM i-sig-själv• Vilken spelare funkar låten på?• Min PC kraschade och iPod snoddes ?

Varför exploderar inte den legala digitala musik distributionen?

”Wallet garden” = driver iväg konsumenter

• Köp på iTunes – funkar bara på iPods• Köp nån annanstans – funkar inte på iPods

• iPod har 80% marknadsandel i USA• iPod has 70% marknadsandel i UK• iPod has 60% marknadsandel I Europa

Longtail ???????

Senaste tidens hetaste musik web site::

www.pandora.com

Music recognition and promotion site exploded in late 2006.

Vad händer då...

Dear Pandora Visitor,We are deeply, deeply sorry to say that due to licensing constraints, we can no longer allow access to Pandora for most listeners located outside of the U.S. We will continue to work diligently to realize the vision of a truly global Pandora, but for the time being we are required to restrict its use. We are very sad to have to do this, but there is no other alternative. We believe that you are in Sweden (your IP address appears to be 195.67.240.90). If you believe we have made a mistake, we apologize and ask that you please contact us at pandora-support@pandora.com If you are a paid subscriber, please contact us at pandora-support@pandora.com and we will issue a pro-rated refund to the credit card you used to sign up. If you have been using Pandora, we will keep a record of your existing stations and bookmarked artists and songs, so that when we are able to launch in your country, they will be waiting for you. We will be notifying listeners as licensing agreements are established in individual countries. If you would like to be notified by email when Pandora is available in your country, please enter your email address below. The pace of global licensing is hard to predict, but we have the ultimate goal of being able to offer our service everywhere. We share your disappointment and greatly appreciate your understanding. Sincerely, Tim WestergrenFounder

The Major Labels main strategi

• Make sure you get paid first in the value chain

• Control what content the consumers should be offered

• Find new revenues in digital (equity, stocks..)

• Keep indies out of loop (probably not a strategy but a result)

•Assumptions by Mr. Bob Lefsetz May 2008 (gjorde vi inte det 1998….)

The Major Labels result

• Huge cash licens advances on a regular basis

• No European digital etailer has recouped more than 21% in any given royalty accounting period 2000 – 2008

Worldwide digital push-in delivery systems

• Digital legal sales are 10% of all sales but that includes ringtones (=not music but merchandising) at most likely 50%

No real growth in direct consumer sales, revenues comes from eTailers, investment money and venture capitalists. (besides some iTunes/web and 3/mobile sales) Assumptions by Mr. Bob Lefsetz May 2008

CD Baby

- Den ledande indie aggregatorn för iTunes USA- 150 000 indie artister- icke exklusiv digital distribution- $35 start up kostnad- labels/artists laddar själva upp- 9% commission på digital försäljning- erbjuder cd försäljning på site för $4 per såld cd

Alternatives:- TuneCore- The Orchard- IODA

Independent label möjlighet:

Basically ONLY USA

Independent label opportunity:

- iTunes affiliate program kanske det bästa

- Länka till iTunes tjäna 5% commission

- Enkelt och effektivt

Affiliate programs

Breaka i USA?

Igår:”...and if you wanna break in America you need these...”

• mtv• top40 radio• indie retail distribution• tour

Breaka i USA?

Idag:”...and if you wanna break in America you need these...”

• spotDJ• imeem.com• mog.com• wimpyplayer• avvenu.com• eyespot.com• mog.com

• burnlounge• tubesocks• slingbox• securitycast

• naturligtvis EJ TILLGÄNGLIGA i Europa.

Hottest new music website right now: Hoooka through Indie911.com

A music store widget that allows Indie911members to make music available for sampleand purchase on OTHER sites outside anysocial network. A MUST TODAY!

Hottest new music website right now: fuzz.com

A hybrid fan site and boutique label. Fuzz helps indie band and their community to organize profiles, share music and chat. Members can track their sales and check where fans and byuers live through Google maps. A huge HIT with lazy A&R guys.

Hottest new music website right now: mog.com

Mog scans your musiclibrary on your computet and then matches it with other users.including TV video high-quality streaming. Subscription available.A huge HIT with music nerds like the guys in the movie ”High Fidelity”

Top 10 Hottest Music Sites

MOG Launches MOG Music Network To Drive Ad Revenue And Exposure For Music Blogs And Music Websites MOG (http://mog.com), a music blogging platform powered by industry-leading music discovery technology, announced the launch of MOG Music Network (MMN), a new advertising network for independent music blogs and music websites. MOG, which was recently named one of the top 10 hottest music websites by WIRED, launches MOG Music Network with more than 30 music blog and website affiliates already in place. To fill out an application to join MMN, visit http://www.mog.com/mmn.

MMN's purpose is to help affiliate sites drive more traffic and generate revenue from advertising. MMN builds online advertising packages that deliver unique benefits over typical ad networks or Google AdSense, including the opportunity to:

-- Increase exposure and drive traffic: Headlines and excerpts from MMN affiliates' posts are published via RSS to an audience of millions of music fans across MOG and the entire network, who click through to read full posts.-- Increase search engine rankings.-- Get access to premier brand advertisers.-- Command premium CPMs.-- Control the kinds of ads and advertisers displayed.-- Set CPM minimums exceeding leading third-party ad sales solutions.

"We're not just repping ads here," said David Hyman, MOG's CEO and founder. "MOG has already built the largest pure music blogging platform. Now we're opening MOG's doors and integrating independent music blogs into our platform. They get to find a brand new audience while benefiting from our back end of community and streaming music."

Hyman continued, "The inspiration for MOG Music Network came directly from music bloggers; they wanted to write once, and publish multiple times -- simultaneously on their own blogs and throughout the MOG network. We delivered that capability as well as the opportunity to generate ad revenue."

Brand marketers wishing to speak to millions of passionate music lovers will find an ideal platform for their messages on MOG Music Network. They will also benefit from working with a team that is experienced at creating digital extensions and convergent promotional opportunities across multiple properties.

"By advertising on MOG Music Network advertisers get the best of both worlds," said Alex Brough, MOG's VP, sales and strategic partnerships. "The quality premium sites on the network help to achieve brand marketing objectives with customized sponsorships while the large network of music sites provide scale and efficiency."

Joining MOG Music Network gives bloggers unprecedented access to a world-class ad sales force. The team is lead by VP, sales and strategic partnerships, Alex Brough, who for the last 10 years was an online ad sales executive at MTV Networks. Brough was responsible for over $20 million in ad revenue in 2007 alone. He also helped run online ad sales at Addicted to Noise, the first music website, where he originally met and worked under David Hyman.

Over the past 15 years, Hyman has pioneered the idea of building brands online-from Hotwired, where he was part of the team that sold one of the first online ads, to co-founding Addicted to Noise, where he brought many major brands online for the first time, including Levi's, Coca Cola, Microsoft and Ford. After a stint as SVP-marketing at MTV Interactive, David was CEO of Gracenote, which was acquired by Sony Corporation in April 2008.

"MOG has assembled the best team on the web to monetize music blogs," concluded Hyman.

Hottest new music website right now: iLike.com

Scans your iTunes library and uses a MySpace widget to automatically update your MySpace friends with your favourite music.Also recommends new hot indie artists through garageland.com.A HIT with besser-wissers

Hottest new music website right now: eventful.com

Interactive tourfilter, scans your iTunes and Last.fm playlists och Last.fm listor and gives notice when your favourite bands hits town. Users can also ”request” bands tocome and play in their hometown, info goes to the artist. Big HIT in America.

Hottest new music website right now: finetune.com

For gamers and musicnerds. Click on an artist name and finetune creates a compilation a compilation which then stream through your Wii.A desktop application allow you to play without a browser. HIT withTop 40 techies.

Hottest new music website right now: groupietunes.com

Allows indie acts to upload songs for ringtones and full-song-download. Buyers are invoiced through mobilephone bill and the artist gets % of sales. Band can also send SMS on forthcoming gigs where fans lives. HIT with iPhone owners.

Hottest new music website right now: slicethepie.com

Slicethepie is a Facebook application for unsigned artists that allows users to review and create Facebook Charts.

Hottest new music website right now: imeem.com

Online social media network. Ad-financed and allows users to share music and content. Deals with SonyBMG, all indie community (Nettwerk, Beggars, IODA, Orchard mfl) soon Universal & EMI. Huge HIT and soon worth XXXXXXX millions.

Top 10 Hottest Music Sites

Imeem imeem is simply the best option we've found for embedding music without worrying about getting permission from a label. In most cases, we're able to find a full song or two to embed from their catalog. Our only quibble with this system is that they only allow 30 seconds of certain songs to be embedded, and there's no way to tell until you preview the post. There's a lot more to imeem than just their blog strategy, of course, which is so powerful in part due to the company's deals with all four major labels for free, on-demand music. The site also includes social networking features, videos and loads of free music. And even songs that can only be embedded as a 30-second version stream in their entirety if you play them while you're signed in to imeem.

Mobil musik funkar bara i Japan

Mobil musik business idag

• Försäljning till kunder 100%

• Operatörens distribution 30%• Aggregator 10%• Förlag, låtskrivare 10%• Minimum licens från skivbolag 70%

• RESULTAT: 120%

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Japanese Labels Deny Master-Ringtone Monopoly August 26, 2008 - Global | Digital and Mobile

Four Japanese labels have filed lawsuits seeking nullification of a July 24 ruling by the government's Fair Trade Commission that they violated the Antimonopoly Law by allegedly preventing other companies from entering the master-ringtone business.

In separate lawsuits filed at the Tokyo High Court on Aug. 25, Sony Music Entertainment (Japan), Avex Network, Victor Entertainment and Universal Music Japan denied they have conspired to monopolize the master-ringtone business by supplying content exclusively to Tokyo-based content aggregator/distributor Label Mobile, which they jointly own.

Steve Schnur CEO Electronic Arts (EA)

-”Linear entertainment is over”

-”Gaming industry always involves consumers – Record industry don´t”

-”Recording industry is the only industry that don´t listen to its consumers”

-”Pay attention to 6-12 year old”

-”To develop the market you have to develop the consumer”

Komma ut själv?

Lägg ut din musik själv:

iTunes - 24/7 - Nokia.se - Aspiro - mfl

-Norska Phonofile-www.phonifile.no

-Norska Artspages-www.artspages.org

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Phonofile A/S er Norges ledende aktør innen rettighetsadministrasjon, salg og distribusjon av musikk som digitale produkter.Kjøp musikken fra MusikkonlinePhonofile har siden 1999 forvaltet de ”digitale rettighetene” på vegne av et stadig økende antall norske og svenske uavhengige plateselskaper.I dag har vi avtaler med over 250 plateselskaper, og sørger for at over 100.000 enkeltinnspillinger blir klarert og tilgjengelig i digital form gjennom en lang rekke ulike tilbydere og tjenester.Phonofile leverer musikk til bl.a iTunes, Telenor/Djuice, Amazon.com, eMusic, Nokia, m.fl.. Fullstendig oversikt over tilbydere av musikk levert av Phonofile finner du her.Phonofile lanserte i 2002 www.musikkonline.no, Norges første kommersielle tjeneste for salg av musikkfiler mot betaling. Musikkonline-plattformen danner også grunnlaget for over 50 nettbutikker for individuelle plateselskap, og er ryggraden i nedlastingstjenestene til aktører som Music Export Norway, Musikkinformasjonssenteret, Kulturnett, Oslo Filharmoniske Orkester, Norway.com m.fl.For profesjonelle brukere (kringkastere, TV-produsenter og lignende) er Phonofile en samarbeidspartner for rask og effektiv levering og klarering av musikk gjennom tjenesten Phonofile Online.Phonofile eies av FONO, NOPA, NRK Aktivum og TV2 Invest.

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Launch your Digital Entertainment WebStore with 24-7 Entertainment!24-7’s digital entertainment service provides e-commerce shops for a range of customers, from retailers to mobile operators.We provide our customers with a flexible service, and high-quality encoded content for download from customisable e-commerce portals.

24/7 Entertainment – Web återförsäljareExp

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24/7 Entertainment – Mobiloperatörer / BredbandsbolagExp

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Mobiljukebox.nl

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Av 24/7 föreslagna digitala aggregatorer:- ArtsPages Norge- Dicentia Sverige- Phonofile Norge- HOS ( House of Scandinavia) Danmark- DKUA/Digidi Danmark- Kontor New Media Tyskland- Zebralution Tyskland

Introduction - Customers

Retailers

Various

Telcos

Introduction – 40 Shops, 13 Countries

Media Markt Saturn Eventim Freenet Weltbild Medion Buecher.de Magix MotorFM

MyMusic /CANWEST

Hash6/SpinFM

TDC / TDC Mobile CDON DK Elgiganten Telmore YouSee

Mobile Jukebox

Ex Libris SoundMedia Weltbild CH MotorMusic Sunrise

Musica Online Telekom Austria Libro Weltbild

CDON NO Elkjøp

CDON SWE Elgiganten

Omnifone/Vodafone

Woolworths Littlewoods Infomedia Play.com

El Corte Ingles

CDON FI Gigantti Meteli

Existing ShopsNew Openings Q3 2008

iTunes

Agreements: 1. Europe 2. USA 3. Japan

4. Australia

Meta Data: Worldwide

Contacts:independentlabels@euro.apple.com

Sign up:www.apple.com/itunes/go/application

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Google offers free music to China5:50 PM, August 6, 2008