This CHART tells you all you need to know: The Death Of The Music Industry

chart of the day, music industry 1973-2009, feb 2011

CHART OF THE DAY: The Death Of The Music Industry

This stunning chart needs to be put in some context to understand the true nature of the upheaval facing what I like to call the “Dinomedia”:

1) Forget About Buying Music Online – People Don’t Even Want To STEAL Music!

2) FREE can actually work, with a little creativity: “How Girl Talk mashes up the Music Biz”.

3) Sony’s new “idea” to launch a me-too Music subscription service priced the way they are proposing is 1) Doomed, and 2) fails to take the reality of the above chart into account:

“Sony believes its huge userbase and retail presence can help its subscription music service succeed where countless similar services have failed.

The Basic tier of service — which will cost $3.99 per month in the U.S. — gives users a set of curated music channels with the ability to fast-forward and rate songs. That’s very similar to what users can get for free from Pandora and countless other Internet radio stations, as well as the free music channels on digital cable TV systems.

The Premium tier — $9.99 per month in the U.S. — is the same price as countless other subscription services (Rhapsody, MOG, Rdio, Microsoft’s Zune Pass, and so on) but doesn’t have any mobile story [yet].”

Their retail presence?! Really? That is exactly the portion of the music business that is dying completely. I thought Denial was usually one of the earlier stages of the “5 Stages of Grief” model…

Why can’t they understand that they have next to NO PRICING POWER left? (Again: Many cannot be bothered to STEAL their product anymore…).

That they are much better off gaining whatever Attention Pie/eyeballs/earballs they can for their music ecosystem (and make further back-end sales there later on, similar to what ONE LONE, yet innovative DJ is able to do)?

For example, what if Sony were to do something bold, and price the “Premium” subscription at $1/month, no contract. That would put it in the complete impulse purchase, don’t-need-to-think, will-likely-never-cancel-for-any-reason category.

What if they could thereby garner 100 Million users, who would be spending about $1.2 Billion, in other words…about 20% of what still is left of the global music industry?!

At that price, could they get 200 Million users? One would hope so. Given that Apple is expecting to sell 40M+ iPad tablet computers costing $499 and up this year alone…

Wake up, #Dinomedia, before it is forever too late…

This SiliconAlleyInsider Sub Headline Reveals Why You Must Move The Freeline

Stop Whining About How Elitist And Expensive TED Is [Just Because] You Didn’t Get Invited
Feb. 15, 2010, 9:17 AM

>> Too bad you missed it! Larry Page gave everyone a free Nexus One.

.

via Silicon Alley Insider.

(Minor edit for colorful language.)

What is amazing about this (the subhead sentence after the headline), is not what it says about TED, but what it says about the future of content creation, and the question of charging for it.

Yes, Larry Page is a multi-billionaire who gave away free Nexus Ones created by his Fortune 500 (currently ranked #150) company, Google, to other well-to-do folks who were able to afford to pay $6,000 for the exclusive TED Talks experience. In doing so, he is following word of mouth (WOM) marketing model 101, of getting your product into the hands of key influencers, and hopefully winning them over, and getting them to evangelize your product.

But aside from all of that, he is showing what the future really holds: With ever cheaper reading & communication devices such as the Nexus One, it will become increasingly common to give those away to users, JUST to have SOME influence over what content (and thereby advertisements) they consume.

In essence, such a give-away represents A PAYMENT of the consumer for consuming content on the “gifters” platform. That is how important it is to get some, any slice of the attention pie. The getting of some of which implies that you will have opportunities down the road to do business with the “giftee” in the form of offers (ads or otherwise) that can be embedded with the content.

Note that it is taking for granted that a lot of content itself cannot be charged for. Why? …

Continue reading “This SiliconAlleyInsider Sub Headline Reveals Why You Must Move The Freeline”

What Dave Winer’s “Natural-Born Blogger” Criteria Have To Do With Entrepreneurs

Proto-blogger and godfather of RSS Dave Winer on his Scripting News Blog writes this week in “Natural-born blogger”:

We get into the subjectives of what makes natural-born blogger [NBB]. Here are some of the ideas.

1. An natural-born blogger doesn’t wait for permission.

2. A NBB explains things, even when they don’t understand. An NBB is often proved wrong, to which the NBB shrugs his or her shoulders and says something like [“So what”].

3. NBBs go first. If there’s an NBB around you don’t have to wait for a volunteer.

4. NBBs err on the side of saying too much. If you find yourself wishing someone would just [shut up already] you’re very likely looking at an NBB.

Note: Small edits for colorful language… 🙂

At first sight, it would appear that these points, while well taken, apply only to blogging. And almost in a too-obvious fashion at that.

Unless you have concerned yourself with all manner of business building and entrepreneurship mindset issues, like I tend to do, and take a second look.

Then it becomes clear to you that these are among the most important guide posts for all entrepreneurial activity, and by extension for success in life in a more general sense:

1. Successful people don’t wait for permission

They don’t wait for someone to appoint them to something important (which almost never happens anyway). They give themselves permission to go ahead, they self-appoint.

If you’re uncomfortable with that idea, then you have just identified an important mindset block that is very likely massively holding you back in your business building efforts or aspirations.

I guarantee that almost no one will ever appoint you the expert of your market niche, you have to give yourself permission to be that expert. Of course, you have to make sure you can back it up, else a self-proclamation will ring hollow over time. But the initial catalyst lies within you alone.

2. Successful people shrug off failure

Successful people shrug off failure as if it means nothing, because… well… it doesn’t. All you ever get is a result, all subsequent meaning of that result exists almost entirely in your head.

Any misstep means only that you must be getting closer to your goal than you were before (when you didn’t take any action at all). And of course hopefully you learned something in the process.

The only thing that truly IS tragic is not failure, but being caught in paralysis due to fear of failure. It keeps you suspended in an infinite “possibility loop”, never wanting to find out the truth by either getting proof-of-concept, or not, and moving on to the next concept. It’s a form of addiction to and idea or ideas we have come to hold dear.

Best to find out this week, this month if that idea is only robbing you of precious psychic and other energy…

3. Successful people are ahead of the curve

In branding/positioning there is the well-proven concept of “first mover advantage”, which tends to bestow disproportionate rewards on those that “show up early to the party”.

While the inventor doesn’t always get financial rewards, the Category Leader, the person or business that can install themselves as first for that category in the minds of the consumer (to be taken in the broadest possible sense of a marketplace here), almost always does.

Hence we get Microsoft being more or less unassailable in the business and consumer desktop computing space, while Apple became nearly as dominant in new categories that it either early and decisively jumped on (the iPod), or more or less created (the iPhone).

Anyone else piling into those categories is fighting an uphill, near impossible battle.

And all of this applies to your small business, or solopreneurship as well: Be first, or at least VERY early in something. Ideally by creating a whole new category, which is otherwise known as innovating.

4. Successful People Move The Freeline

While Dave Winer does not explicitly state it here, the idea of erring on the side of saying too much implies the principle I like to call “Moving the Freeline”:

You have to say AS MUCH AS POSSIBLE about what you are trying to get across to people, which means that you have to, in a sense, give your best ideas away!

You can’t hide them behind a Pay-Wall (and even $1 may be too much for people to begin to listen to what you have to say, what you have to offer).

You can’t operate in a way that says: “Once you pay, I’ll tell you something useful or important”.

You can’t drop mere hints about what you have to offer, you have to give away A LOT of the real thing.

Most marketing copy gets this wrong when it merely focuses on trying to persuade, rather than just showing a lot of the goods.

You have to give every possible reason for the other party to do business with you by telling them (nearly) everything you know that could apply to them, free of the irrational fear of being ripped off or plagiarized somehow.

Only then do you have a real chance.

And in order to be able to do this, you have to apply a mindset that most successful people have, what Eben Pagan would call “feeling wealthy right now”.

You see, unless you get to that point of feeling abundant in your ideas right now, you will hold yourself back from getting the business you deserve, because the other party cannot ascertain whether a transaction would be worth their risk.

Does Moving The Freeline Make You Nervous?

In case this kind of openness makes you nervous, you can calm yourself by understanding a few key truths:

The fear that someone wants to rip off your ideas is nearly always an illusion, usually you have the exact opposite problem, that of getting ANYONE to give a dear about you, your business, and your ideas.

Also, the so-called “Curse Of Knowledge” has you systematically underestimate how far you are leaving the non-expert audience behind as an expert in a given arena (see Heath & Heath, Made To Stick).

Even if they wanted to, almost no one would be in a position to replicate your deeper ideas from scratch, without incurring a very significant learning curve.

Of course, if they REALLY wanted to (which is a big if), they could catch up eventually. Which is where the “show up early” principle comes in.

But in the interim, you can, as a consultant say, tell a prospective business EVERYTHING you might do for them in great detail. And it still would be much more likely that they would hire you to work with them, rather than trying to turn around and execute all of these details themselves, cold, from scratch.

To finish up with an example, a prolific tech blogger like Robert Scoble is constantly giving his best ideas away. And certainly a lot of people would say that he can err on the side of saying too much. But that is also how he creates massive value up front, and keeps people engaged with his idea process.

Money and profit become side-effects of his massively “Moving The Freeline” in this way day in and day out. Do thou likewise…