1 Music 2.0 Revenue Streams, Consumer Behavior and Policy Issues Kristin Thomson Ignite : Philly June 11, 2008 Kristin Thomson and Michael Bracy Future of Music Coalition Educause, December 16, 2009

2 Giving Musicians a Voice Founded in 2000 by musicians, artist advocates, technologists and legal experts Work is rooted in the real-world experiences of musicians Musicians and creators as stakeholders in policymaking process

3 FMC Core Philosophies Policy decisions made in Washington have a much greater impact on the music community than many people realize Artists need to be seen as stakeholders The only antidote to an illegal Napster is a legal Napster Innovation + Access => growth of a legitimate digital music marketplace

4 FMC Policy Objectives Access to technology and deployment competitive broadband marketplace broadband affordable and accessible Innovation is key support development of new applications and models that compensate creators support network neutrality FMC’s Rock the Net Campaign started 2005

5 Musicians and the old model for “success” Access to financing to record and manufacture Access to promotion Commercial radio Music industry and mass media magazines MTV Access to distribution retail stores

6 Major label contract …but artists had to sign away their copyrights in perpetuity

7 Music industry’s traditional model Exclusive right to manufacture and distribute sound recordings Revenue from CD sales Revenue from licensing deals Invested in promotion to sell more records Videos Tour support Radio payola

8 All efforts funneling consumers to controllable points of purchase

9 Technology benefits musicians Digital studios affordable recording More promotional channels, many free Internet and satellite radio Social networking: MySpace, Reverbnation, Facebook, last.fm, Twitter Blogs YouTube More universal access to distribution lower barriers to entry for digital distribution channels

10 New landscape for consumers...and labels Sudden abundance limitless shelf space 24/7 worldwide access to music even “out of print” albums were available in early days of digital music, it was free Labels unable to control manufacture and distribution

11 New ways to access music Digital Stores Physical media through mail Digital files On Demand Playback Subscription services Ad supported Webcasting, Satellite and Internet Radio

12 Extra credit reading Music Business Models futureofmusic.org/article/article/new-business-models Spreadsheet of how labels, performers and songwriters are paid via various music services: futureofmusic.org/files/newbusinessmodels.pdf Illustration of how independent or unsigned musicians can use companies like CD Baby, ReverbNation and Tunecore to get their music into various music stores:

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18 Subscription services

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24 Webcasting + Radio

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30 What will Music 3.0 look like?

31 What will Music 3.0 look like? Music consumers will continue to want access to robust, complete catalogs of music to play “their” music on many devices, including cellphones, in their dorm rooms, in their cars to build playlists, share them with friends to follow their favorite artists and bands via social networking tools/Twitter Musicians and rightsholders want fair compensation, equal access to new technologies

32 Can we strike a balance between artist compensation and consumer expectations?

33 Music 3.0 and Policy Net neutrality Access to affordable, reliable broadband Proper metadata Future work Research on artists’ revenue streams

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