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8/14/2019 The Future of Music Publshing - Music Publishers Canada Interview June 2006 (Gerd Leonhard)
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8/14/2019 The Future of Music Publshing - Music Publishers Canada Interview June 2006 (Gerd Leonhard)
http://slidepdf.com/reader/full/the-future-of-music-publshing-music-publishers-canada-interview-june-2006 2/2
12 Music Publisher Canada / Summer 2006
In The Future of Music you’re highly criti-
cal of the old thinking on which the record busi- ness is built and contrastingly positive about
the future of music publishing. In fact, you
write: “Ultimately, publishing will, by default,
become inseparable from distribution. The tasks
performed by what used to be ‘record labels’ will
be morphed into the publishing business . . .”
Can you elaborate?
The basic thing going on in digital
networks is that something is being pub-
lished; people publish themselves, they
publish other people. What music pub-
lishers realize is that it’s no longer about
delivery because delivery is essentially
free, or at least the cost is moving towards
free because storage is so cheap now. So
the challenge lies not in the distribution
but in gaining the consumer’s attention.
A publisher makes money by having his material paid attention to,
basically by exposure. The music publisher used to go to Nashville
and tell an artist, “Record this song and we’ll all make a million.”
Now he goes to the web and posts his stuff, essentially previewing it
as widely as possible through, for example, syndication and blogs,
podcasts, videogames, thereby
creating demand. So as a pub-
lisher, all you have to do is set up the toll booth a little bit
later—you don’t want to ask
for money too early because
it turns off the exposure.
MySpace.com is a good exam-
ple, it provides unpaid musical performances and downloads and
nobody’s saying much about it because it’s essentially the next MTV.
Getting all that exposure is worth a lot more than getting $37 for a
performance. So publishers understand that the internet is a great
vehicle for exposure, while a distributor, which is really a record
label (at least it used to be), is no longer much of a game because
distribution is not a big deal anymore.
Neither is production—another point you make in your book. These days
everybody’s got ProTools and GarageBand on their computers and can record
a song in their bedroom.
Right, but although it’s getting cheaper, it’s not getting easier.
To make a good song or a good production is probably even more
difficult now because you have more options. To me, creating good
content and having professional level production really is profes-
sional work. You may be able to write a song on the spur of the mo-
ment but to whip it into shape and make it sound great is a whole
other cup of tea. So that means the publisher is in particularly good
shape because the song or the idea can be created rather quickly
but somebody will have to pay for the production, which may or
may not be the publisher these days. All the publisher has to do isget his or her hands into the revenue streams that are basically com-
ing up out of the blue, for example, podcasting and webcasting.
But people aren’t paying for podcasts at this
point.
No, but you don’t necessarily want people
to pay for the content in a one-to-one rela-
tionship. For example with a book, you buy
the book, you pay for the book, there’s no
advertising in the book. But on the internet
it’s possible to sell all kinds of coupled me-
dia so that people buy one thing but they get
several others with it. In the bundling pro-
cess you can create value for the user but it
doesn’t cost very much for the producer. In
the future we won’t sell media like we used
to sell CDs. We’ll bundle it, wrap it in other
offerings, do quite a bit of up-selling, we’ll
move the toll booth.
As I said, you no longer look to sell a song for $1, that’s not going
to work in any large way. What’s going to work is selling a wireless
subscription to Sprint, for example, where you pay $3 for any and
all streams of music on the network, you just dial in. And with that
you have a mechanism to capture interest. But that’s where the legal
challenge comes in; you can no longer say it’s a per-unit or per-copy
fee. We see a revenue share and this is also why publishers are in a
great position because they’ve always worked with revenue shares,
while the record guys are so locked into a per-unit mentality.
In the book you suggest that the ownership models of iTunes and other
digital retailers are doomed, that the model of the future will position music
as a service rather than as a product. And yet subscription services have so far been very slow to catch on. What do you think will be the chief catalyst in
shifting the public’s consumption behaviour?
Music subscriptions as offered by Napster and Yahoo and Rhap-
sody are fantastic services but they’re not quite working yet as tech-
nologies because you can't port the music to a mobile device (at
least you couldn't the last time I tried). So there are significant
problems because of digital rights management software. Subscrib-
ers have to be painstakingly geeky to make it work. iTunes is so suc-
cessful because it’s fashionable and it’s a great device, but music-
wise, eventually you stop buying at $1 per song, I mean you’re not
going to spend $20,000 to fill your iPod.
The only way to solve the problems in the music business is to go
from buying to subscribing because the value proposition for theuser is much more powerful. As a subscriber I have seemingly limit-
less choices and it feels like free in a way, just like
“The only way to solve the problems in the music business is to go frombuying to subscribing because the value proposition for the user is muchmore powerful. Imagine the kinds of exploration that will take place whenpeople can surf for music the way they surf on cable TV.”
Q UESTIONS for Gerd LeonhardCo-author of The Future of Music talks about how and why musicpublishers are poised to make themost of the digital revolution.
Continues page 11