Everything Changed in Music - Weekend media festival 2012

Report
The changing music industry
Live Nation produces over 20,000 shows annually for more than 2,000 artists
globally. I built and ran the global digital division, which is now a top-5 global
ecommerce site generating more than 25 million unique users per month
Currently, investor and board advisor with early stage music, technology, and
retail startups; grew a startup from $0 to >$200 million in annual sales in 3 years
Managed $5 billion P&L for a global retailer
Prior experience working with the United Nations, White House, and non-profits
What the F*%k happened to the
music industry?
Executives in the Music Industry
miss the “good old days”…
And they miss the era of rockstars
Mozart earned about $120,000 per year in today’s
dollars--a middle class income
He survived by taking commissions—Can you imagine
Lady Gaga writing songs for people’s birthdays?
He died penniless and was buried in a paupers grave
The new "galant" style was far easier to play than the traditional
contrapuntal style, opening performance to amateurs and
reducing the cost of professional productions
The invention of the fortepiano, an instrument as loud as the
harpsichord yet as subtle as the clavichord, made it possible to
play the new music for much larger groups
Enabled a new era in which concert hall music, paid for by
subscription, became a bourgeois pastime.
$100,000+ and many weeks
in specialized studios
Nominal cost using protools
on a laptop
Massive costs and waste to
produce physical product
Endless free digital
duplication on demand
Hundreds of thousands of
retail stores across the world
iTunes, Amazon, artist sites
Reliant on radio play and
required industry contacts
Social media allow fans and
artists to spread the word
Records took up a large part
of the living room
Music “lives” on your phone
(or in the cloud)
More people are listening to music than ever before
More people are making music than ever before
…Business models and regulatory frameworks have to
evolve to meet the needs of the market
• Embrace technology early rather than fight it
• It is sometimes impossible for legacy structures to
adapt; when they can’t they will be replaced. It’s
nothing personal—it’s just evolution
What we have:
• Enabling technologies are HERE
• Market demand is HERE
What we need to solve:
• Effective and transparent rights/royalty
management
• Better artist/content development mechanisms
• Filters and curation
• Investment regimes tolerant of failure and
iteration
• Niche strategies that scale
Hollywood just witnessed its lowest summer cinema attendance figures in two
decades, with 533.5 million tickets sold this season, a 4% drop from a year ago.
Even with the help of inflated 3D movie ticket prices, summer box office, at
$4.278 billion, was also down from 2011’s record $4.4 billion.
Cost: $220 Million
Gross: $1.5 Billion
Cost: $250 Million
Gross: $282 Million
• As revenue declines, media companies
become more risk averse
• Place fewer “bets”, but bank heavily on those
bets
• Quality declines as the product is tailored to
the lowest common denominator
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