Are we just doing it wrong?
The downer argument is that price-points are careening towards zero, scarcity has evaporated, and monetization is a lost cause. But what about all the vast number of passives? The group that isn’t engaged, isn’t paying, or just hasn’t been approached the right way?
Here’s the take from ‘Tommy Boy’ Silverman, a fabulously successful executive in the old model, and someone with some interesting questions about the new. He just made these comments in a broader interview with Musician Coaching.
The number I’ve heard recently is that there are about 200 million music buyers in the world. And there are about seven billion people in the world. So, if we can make that 200 million grow to 250 million, we can make a little bit more money. But that would only take the net world music business from $16 billion to $20 billion. It won’t take it back to its peak in 1999. It will just make it a little bigger.
If we can get the people who are buying music to buy more music, maybe we can push it a little further than that. And if we can get them to spend a little more money, we might be able to take it even further than that.
But none of this will take us to a $100 billion worldwide business. The only way we’ll get there is by finding a way to monetize passives. Because, the passives outnumber music buyers – there are six billion passives vs. 200 million music buyers.
There are six billion activated cell phones in the world. 
And there are 1.2 billion smartphones activated now, which means smartphones that are actively being used, with active subscriptions that have been paid for.
Spend more money for buying music? There is a crisis going on!
Since the trend is moving towards smartphones, bundling streaming services with cell phone subscriptions may be an easier solution.
“Are we just doing it wrong?” Pretty much reveals who you are working for.
“is the music industry just doing it wrong?” might be a little more journalistic. Oops I forgot, “blogs” don’t need to show integrity. Are you just a shill for the major labels?
I’m sorry, this is an excerpt from the owner of an independent label. Are you missing something here?
And if you capture 1% or even .001% of the 200 Million people, your sales will satisfy you.
Once again, your point is? We are in a Global Depression. PERIOD. Of course most readers beleive in HOPE AND CHANGE and all that Fuzzy feeling stuff.
Bottom line, there isn’t an Industry that has been kicked down hard but Oil. Yes, that evil substance that makes, Vinyl, Medicine, Clothing, Plastic, and about 100000s other things that 7 Billion people use….oh yea, creates the Worlds ENERGY! But, lets not look at that silly little industry.
Back to Digital Down Loads. Our label is making money. We are in a “Music” field that is less than .0000001% of all that “POPular Music out there”. Electronic Dance Music. But, yet we are pulling in consumers off of Itunes. Not your typicl store for EDM. Never the less, sales have increased quarter after quarter.
I hardly ever read DIGITAL MUSIC NEWS speak of “success”. Most you clowns trash Digital Service Providers, Digtial this and that.
You sound like a bunch of cry babies. It’s pathetic. Face the reality and face the challange head on and learn to make money in this industry. Otherewise, start a Web News Service/Magainze and Complain.
Hey pal – how come you have such a king-sized chip on your shoulder?
The article – based on quoting an observation by Tommy Boy Silverman – contains perfectly reasonable food for thought.
It’s a perfectly sensible proposition to suggest that the musical industry would prosper more if it could get more of the 6.8 billion people who don’t currently pay for music at all to start paying for music. That as opposed to just trying to encourage the 200 million who do pay for music to pay more and more.
And yet from you this provoked an angry and incoherent response. What’s the matter, man?
I’m late to the party on this one, but felt compelled to respond to this individual with the successful electronic dance music company.
It is really simple, ROI. Of all the music genres, the creation of edm is very, very inexpensive and production times are extremely fast. Now, if I were a businessman looking at the most secure and profitable way to achieve positive ROI, edm would certainly be on my short list.
It also translates into one of the most profitable touring genres, because you really don’t need much infrastructure, possibly 2 laptops and a sound system provided by the club or venue.
So, while I congratulate on your choices, you really can’t compare what you do to most other genres, at least in terms of operating expenses.
And you should be grateful that your genre is small and you have less competion.
So without me sharing my valueless opinions about edm, what’s your point Jack?
well said, ralph music http://www.thisflighttonight.com
Gas prices eating away at disposable income got you down? Sorry to hear that.
The key is whether mobile carriers will include services such as Spotify in their basic plans. Then people will not have to feel that they are paying “twice,” once for the mobile service and again for the music service. For instance, Spotify requires you to pay for mobile service beyond a free trial period. I used the trial on vacation and loved it but was not inclined to pay once I returned home because I get Spotify for free on my PC and dont usually listen to music on my smart phone.
Why would a mobile service pay Spotify to include it on their basic plan? I was deciding recently whether to go with AT&T or Verizon for my new iPhone. I chose AT&T for 4G. But if Verizon was offering “free” mobile Spotify I may have signed up with them instead of AT&T.
If the mobile services offered authorized music services as part of their basic plans, those services would be far more successful by making money from the carriers (getting a split of subscription revenues) and would have more money to pay music owners. Of course there would still be the issue of whether indie artists would see more money, but the big labels and music publishers certainly would.
Tom Silverman touched on this issue in my interview with him
Steve/stevegordonlaw.com
touche !
I understand there are 200 million cell phone subscribers in China, out of a 1.3 billion population, compared to 150 million cell phone subscribers among the US’s 150 million cell phone subscribers. Of course, most of those relatively rich Chinese who can afford a phone don’t have smart phones, which is a smaller subset, and they pay far less than Americans for their data and wifi service. But if we (the big bad music industry) can get them chinese music fans to kick in a few cents a month on their phone bill, its a start. But it ain’t gonna be anywhere near $9.99/month. Maybe for a few pennies a month, we can give them access only to Chinese Democracy .
Perhaps “Welcome to the Jungle” would be more appropriate 🙂
In the longterm, every disrupted content industry is going to want their content bundled with service packages. To support all of these industries, service prices are going to skyrocket, which means these packages are going to be optional. And then you run into the same problem you had to start… that people just don’t care enough to pay.
Paul, I think your pie missing a very, very large slice, & that’s the “disengaged” slice. “Passive” seems to indicate that they’re interested, but just not willing to pay. The truth is that music isn’t the driving force in culture it once was & a lot of people just aren’t interested. I don’t think anyone needs a history lesson on how music reflected culture in the 50’s, 60’s, 70’s, 80’s, & 90’s, but the music on the billboard charts today is relevent to about as many people are “engaged.”
It’s pretty funny that, rather than finding ways to turn legitimately passive music listeners into “engaged” music listeners, an executive is suggesting that the answer is to milk disengaged consumers of another industry with hidden fees in order to recapture the profits of the late 1990s in the middle of a multi-year recession. On top of that, the music industry is making very little if any attempt to make itself relevant to the disengaged consumer. Bully for him for having loads of success in the past, but Tommy Boy is laughably out of touch today.
Lack of vision, contempt for technology, contempt for the consumer… sounds like business as usual. I dunno why anyone would be listening to any executive who’s presided over the industry’s fall from grace.
Also remember that as the “industry” is trying to bilk uninterested “buyers” every government is trying to bilk the exact same person (read: taxpayer) for a few dollars more every year.
Why provide people with goods and services they will willingly purchase when you can get their money the old-fashioned, rent-seeking way?
Great info!
Music has less perceived value. It stands for nothing now.
Music still has a lot of value.
The problem is that some people started expressing the value of music in dollars. When did that start?
The problem is that some people started expressing the value of music in dollars. When did that start?
When the first musician/composer/producer had to pay the first rent bill.
All of the music and concert video I wanted to buy in the last 12 months are not available anymore. Out of stock.
What ? you want me to buy digital media, F! you man, I don’t care of this crap, I want the original with the good sound of the studio.
What ? there is too much music for all to be available on my store ? It’s not my problem !
What we need is more albums like Adele’s, no more buyers.
Need more good albums, buyers will come.
I think its more than a little strange to consider every single person on the entire planet as a potential music buyer. Third world? Jungle/desert tribes? Buddhist monks? Infants? The infirm? Prisoners? etcetcetc…
All hail smartphones?
Interesting figures! A bit unsure about how the figures are calculated though…
Why should people buy music when for a small subscription fee they have access to a virtually unlimited supply of songs? And with today’s economy not many are making impulse buys. The streaming industry is destroying the music industry. The streamers need to revamp. They need to promote, at their expense, new releases by Indies and pull new releases of established artists after three weeks of exposer, then shelve those releases for three years before making them available again to the public. Take away a favorite song and the public will be induced to buying the song. And who in the hell wants to listen to music on a dumbass smart phone? You might as well as listen to a transistor radio. Hmm? The quality made you want to buy the record. Hmm?
Personally I think there are lot’s and lot’s of good albums being released. I know, because I listen to and review lots of them for the web series Music Worth Buying…….But what is missing is a large unifying place/filter/outlet for the average person to be exposed to that new music.
Radio and MTV used to fill that void, but no longer do.
One of the upsides of the internet is that it has created more outlets for media
One of the downsides of the the internet, is that all those outlets have fractured media to the point that there is no unifying filter or outlet that can supply the kind of exposure that new music needs.
Very well put
Media outlets need to be exploited in a way that information gets circulated with a possibility of monetizing the product.
A new mystic needs to be created for the music if at all possible …
If there is a well known artist and one wants their music, one only needs to go to YouTube and/or Grooveshark. They are both stream on demand. If there is a lesser known artist, their website more than likely streams it on demand. If that doesn’t work, simply ask the indie artist for the track, they’ll give it to you. Interpret this any way you wish.
Hmmmmm…
As a musician and artist myself (and a highly struggling one at that) I would say if there is some way to create barter situations for food/ housing/ other needs, it would be just as good or better than $. Many of us want to be creating and that’s what we are happy doing, we need a roof over our heads and veggie food and such though, and may not necessarily be able to, or want, to go back home to our parents for various reasons.
Also, government Social services are often provided for handicapped, welfare, mental problems people, children, elderly. Why not for real artists and activists who are creating a better world with their work? We are majorly handicapped in a money-focused society and need more ready sources of support.